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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>As filed with the Securities and Exchange Commission on January 27, 2011  </B></FONT></P>

<P ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </B></FONT></P>


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<div style="width:100%;border-top:solid #3B5A6F 1.0pt;padding:0in 0in 0in 0in;font-size:4.0pt;"></div>  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Washington, D.C. 20549  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B>Form&nbsp;S-1<BR>  </B></FONT><FONT COLOR="#3B5A6F" SIZE=1><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF&nbsp;1933  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B>BODY CENTRAL CORP.<BR>  </B></FONT><FONT COLOR="#3B5A6F" SIZE=1>(Exact name of registrant as specified in its charter) </FONT></P>

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<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Delaware</B></FONT><FONT COLOR="#3B5A6F" SIZE=1><BR>
(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> 5600</B></FONT><FONT COLOR="#3B5A6F" SIZE=1><BR>
(Primary Standard Industrial<BR>
Classification Code Number)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> 14-1972231</B></FONT><FONT COLOR="#3B5A6F" SIZE=1><BR>
(I.R.S. Employer<BR>
Identification Number)</FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>6225 Powers Avenue<BR>
Jacksonville, FL 32217<BR>
(904)&nbsp;737-0811<BR>  </B></FONT><FONT COLOR="#3B5A6F" SIZE=1>(Address, including zip code, and telephone number, including<BR>
area code, of registrant's principal executive offices) </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Julia B. Davis<BR>
General Counsel<BR>
6225 Powers Avenue<BR>
Jacksonville, Florida 32217<BR>
(904)&nbsp;737-0811<BR>  </B></FONT><FONT COLOR="#3B5A6F" SIZE=1>(Name, address, including zip code, and telephone number, including area code, of agent for service) </FONT></P>

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<TD COLSPAN=3 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Copies to:</B></FONT></TD>
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<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=1><B> Michael B. Kirwan<BR>
John J. Wolfel, Jr.<BR>
Foley&nbsp;&amp; Lardner&nbsp;LLP<BR>
One Independent Drive, Suite&nbsp;1300<BR>
Jacksonville, Florida 32202<BR>
(904)&nbsp;359-2000</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B><BR>&nbsp;</B></FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=1><B>William F. Schwitter, Esq.<BR>
Paul, Hastings, Janofsky&nbsp;&amp; Walker&nbsp;LLP<BR>
75 East 55th&nbsp;Street<BR>
New York, New York 10022<BR>
Phone: (212)&nbsp;318-6000<BR> </B></FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Approximate date of commencement of proposed sale to public:<BR>
As soon as practicable after this Registration Statement is declared effective.  </B></FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933 check the
following box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>If this Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>If this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>If this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(d) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule&nbsp;12b-2 of the Exchange Act. </FONT></P>
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<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Large&nbsp;accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Non-accelerated&nbsp;filer&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT><BR></FONT> <FONT COLOR="#3B5A6F" SIZE=1>(Do not check if a<BR>
smaller reporting company)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Smaller&nbsp;reporting&nbsp;company&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
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<TH ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Title of Each Class of Securities<BR>
to be Registered</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Amount to be<BR>
Registered<SUP>(1)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Proposed Maximum<BR>
Offering Price<BR>
per Share<SUP>(2)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Proposed Maximum<BR>
Aggregate Offering<BR>
Price<SUP>(1)(2)</SUP></B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>Amount of<BR>
Registration Fee</B></FONT><BR></TH>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:4pt;text-indent:-4pt;"><FONT COLOR="#3B5A6F" SIZE=1><B> </B></FONT><FONT COLOR="#3B5A6F" SIZE=1>Common Stock, $0.001 par value per share</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,750,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$17.95</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$103,212,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$11,982.97</FONT></TD>
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<TD COLSPAN=9 VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;"><p style="font-family:times;margin-left:4pt;text-indent:-4pt;"> &nbsp;</TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Includes
750,000 shares of common stock that the underwriters may purchase pursuant to the over-allotment option to purchase
additional shares, if any.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Estimated
solely for the purpose of calculating the registration fee, based on the average of the high and low prices for the registrant's
common stock as reported on The NASDAQ Global Market on January&nbsp;25, 2011, pursuant to Rule&nbsp;457(c) under the Securities Act of 1933, as amended. </FONT></DD></DL>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file&nbsp;a further
amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section&nbsp;8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting pursuant to Section&nbsp;8(a), may determine.</B></FONT></P>

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</B></FONT><FONT COLOR="#D90026" SIZE=2><B>The information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities
and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.</B></FONT></P>

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</B></FONT><FONT COLOR="#D90026" SIZE=2><B>Subject to completion, dated January 27, 2011</B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=4><B>PROSPECTUS  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=4><B>5,000,000 Shares  </B></FONT></P>
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<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=5><B>Body Central Corp.</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=5>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=5><B>
<IMG SRC="g455410.jpg" ALT="BODY CENTRAL CORP. LOGO" WIDTH="288" HEIGHT="60">
<BR> </B></FONT></TD>
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 <P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=4><B>Common Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=4><B>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share  </B></FONT></P>

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<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#005E8A" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>Body Central Corp. is offering 100,000&nbsp;shares and the selling stockholders are offering 4,900,000 shares. We will
not receive any proceeds from the sale of our shares by the selling stockholders.  </FONT> <FONT COLOR="#005E8A" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#005E8A" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>We anticipate that the offering price will be between $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. </FONT> <FONT COLOR="#005E8A" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#005E8A" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>Our common stock is listed on The Nasdaq Global Market under the symbol BODY. On January&nbsp;26, 2011 the closing price
of our common stock as reported on The NASDAQ Global Market was $18.02. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2><I>

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<P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2><B>This investment involves risk. See "Risk Factors" beginning on page&nbsp;12.</B></FONT></P>
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<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="46pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#005E8A" SIZE=2> </FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#005E8A" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#005E8A" SIZE=1><B><BR>&nbsp;</B></FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT COLOR="#005E8A" SIZE=1><B><BR>
Per Share </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#005E8A" SIZE=1><B><BR>&nbsp;</B></FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #000000 1.0pt;"><FONT COLOR="#005E8A" SIZE=1><B><BR>
Total </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#005E8A" SIZE=1><B><BR>&nbsp;</B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#005E8A" SIZE=1><B> </B></FONT><FONT COLOR="#005E8A" SIZE=2>Public offering price</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#005E8A" SIZE=2> </FONT><FONT COLOR="#005E8A" SIZE=2>Underwriting discount</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#005E8A" SIZE=2> </FONT><FONT COLOR="#005E8A" SIZE=2>Proceeds, before expenses, to Body Central Corp.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#005E8A" SIZE=2> </FONT><FONT COLOR="#005E8A" SIZE=2>Proceeds, before expenses, to selling stockholders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=7 VALIGN="BOTTOM" style="font-family:times;border-bottom:double #000000 2.25pt;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"> &nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2><I>The underwriters have a 30-day option to purchase up to 750,000 additional shares of our common stock from the selling stockholders to cover
over-allotments, if any.</I></FONT></P>


<P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2><B>Neither the Securities and Exchange Commission nor any state securities commission has approved of anyone's investment in these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.</B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2>The
shares will be ready for delivery on or
about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011. </FONT></P>
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<TD COLSPAN=3 ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2><I>Joint Book-Running Managers</I></FONT></TD>
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<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT COLOR="#005E8A" SIZE=5><B> Piper Jaffray</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=5><B><BR>&nbsp;</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT COLOR="#005E8A" SIZE=5><B>Jefferies<BR> </B></FONT></TD>
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<TD WIDTH="218pt" style="font-family:times;"></TD>
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<TD WIDTH="28%" style="font-family:times;"></TD>
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<TD COLSPAN=5 ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT COLOR="#005E8A" SIZE=2><I>Co-Managers</I></FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><BR><FONT COLOR="#005E8A" SIZE=4><B> Baird</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=4><B><BR>&nbsp;</B></FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT COLOR="#005E8A" SIZE=4><B>William Blair&nbsp;&amp; Company</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=4><B><BR>&nbsp;</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><BR><FONT COLOR="#005E8A" SIZE=4><B>Oppenheimer&nbsp;&amp;&nbsp;Co.</B></FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#005E8A" SIZE=2><B>The date of this prospectus
is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011.  </B></FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="BG78401A_main_toc"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="bg78401_table_of_contents"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  TABLE OF CONTENTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="BG78401_TOC"></A> </FONT></P>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Page </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
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<TD style="font-family:times;"><A HREF="#ca78401_prospectus_summary"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Prospectus Summary</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ca78401_prospectus_summary"><FONT COLOR="#3B5A6F" SIZE=2>1</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#de78401_risk_factors"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Risk Factors</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#de78401_risk_factors"><FONT COLOR="#3B5A6F" SIZE=2>12</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#di78401_special_note_regarding_forward-looking_statements"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Special Note Regarding Forward-Looking
Statements</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#di78401_special_note_regarding_forward-looking_statements"><FONT COLOR="#3B5A6F" SIZE=2>31</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dk78401_use_of_proceeds"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Use of Proceeds</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dk78401_use_of_proceeds"><FONT COLOR="#3B5A6F" SIZE=2>33</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:times;"><A HREF="#dk78401_market_price_of_common_stock"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Market Price of Common Stock</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dk78401_market_price_of_common_stock"><FONT COLOR="#3B5A6F" SIZE=2>33</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#dk78401_dividend_policy"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividend Policy</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dk78401_dividend_policy"><FONT COLOR="#3B5A6F" SIZE=2>33</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#dm78401_capitalization"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Capitalization</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dm78401_capitalization"><FONT COLOR="#3B5A6F" SIZE=2>34</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#dq78401_selected_consolidated_financial_and_operating_data"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Selected Consolidated Financial and Operating
Data</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dq78401_selected_consolidated_financial_and_operating_data"><FONT COLOR="#3B5A6F" SIZE=2>36</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ds78401_management_s_discussion_and_an__man03466"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Management's Discussion and Analysis of Financial Condition
and Results of Operations</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ds78401_management_s_discussion_and_an__man03466"><FONT COLOR="#3B5A6F" SIZE=2>40</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#dw78401_business"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Business</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dw78401_business"><FONT COLOR="#3B5A6F" SIZE=2>62</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#dy78401_management"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Management</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#dy78401_management"><FONT COLOR="#3B5A6F" SIZE=2>74</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ea78401_executive_compensation"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Executive Compensation</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ea78401_executive_compensation"><FONT COLOR="#3B5A6F" SIZE=2>83</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#eg78401_certain_relationships_and_related_party_transactions"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Certain Relationships and Related Party
Transactions</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eg78401_certain_relationships_and_related_party_transactions"><FONT COLOR="#3B5A6F" SIZE=2>96</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ei78401_principal_and_selling_stockholders"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Principal and Selling Stockholders</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ei78401_principal_and_selling_stockholders"><FONT COLOR="#3B5A6F" SIZE=2>100</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#ek78401_description_of_capital_stock"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Description of Capital Stock</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#ek78401_description_of_capital_stock"><FONT COLOR="#3B5A6F" SIZE=2>102</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#em78401_description_of_certain_indebtedness"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Description of Certain Indebtedness</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#em78401_description_of_certain_indebtedness"><FONT COLOR="#3B5A6F" SIZE=2>107</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#eo78401_shares_eligible_for_future_sale"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Shares Eligible for Future Sale</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eo78401_shares_eligible_for_future_sale"><FONT COLOR="#3B5A6F" SIZE=2>108</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#eo78401_certain_material_u.s._federal___cer02773"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Certain Material U.S. Federal Income Tax Considerations to
Non-U.S. Holders</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eo78401_certain_material_u.s._federal___cer02773"><FONT COLOR="#3B5A6F" SIZE=2>110</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#eq78401_underwriting"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Underwriting</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#eq78401_underwriting"><FONT COLOR="#3B5A6F" SIZE=2>114</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#es78401_legal_matters"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Legal Matters</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#es78401_legal_matters"><FONT COLOR="#3B5A6F" SIZE=2>121</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#es78401_experts"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Experts</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#es78401_experts"><FONT COLOR="#3B5A6F" SIZE=2>121</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#es78401_where_you_can_find_more_information"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Where You Can Find More Information</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#es78401_where_you_can_find_more_information"><FONT COLOR="#3B5A6F" SIZE=2>121</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><A HREF="#INDEX_TO_FINANCIALS"><p style="font-family:times;margin-left:36pt;text-indent:-36pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Index to Consolidated Financial Information</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#INDEX_TO_FINANCIALS"><FONT COLOR="#3B5A6F" SIZE=2>F-1</FONT></A></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>You
should rely only on the information contained in this prospectus or any free writing prospectus filed with the Securities and Exchange Commission. We have not, and the selling stockholders and
underwriters have not, authorized any other person to provide you with different information. Neither
this prospectus nor any free writing prospectus is an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this
prospectus and any such free writing prospectus is complete and accurate as of the date on the front cover, regardless of its time of delivery or of any sale of shares of our common stock. The
information may have changed since that date. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Persons
who come into possession of this prospectus and any such free writing prospectus in jurisdictions outside the U.S. are required to inform themselves about and to observe any restrictions as to
this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>i</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Basis of Presentation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the
Saturday closest to December&nbsp;31st. The reporting periods contained in our audited financial statements included in this prospectus contain 52&nbsp;weeks of operations in fiscal year 2009,
which ended January&nbsp;2, 2010, 53&nbsp;weeks of operations in fiscal year 2008, which ended January&nbsp;3, 2009, and 52&nbsp;weeks of operations in fiscal year 2007, which ended
December&nbsp;29, 2007. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;1, 2006, the acquisition by Body Central Corp. of all of the outstanding capital stock of Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. was completed. As a
result of this acquisition, Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. became our wholly owned subsidiaries. We generally refer to this acquisition and the related
transactions in this prospectus as the "2006 Transaction." On October&nbsp;2, 2006, after the 2006 Transaction, we began a new basis of accounting. As a result of that change in our basis of
accounting, the 2006 financial reporting periods presented in this prospectus include the predecessor period of Body Central Corp. and its subsidiaries, reflecting approximately 39 weeks of operating
results of its now wholly owned subsidiaries from January&nbsp;1, 2006 to October&nbsp;1, 2006 and approximately 13 weeks of operating results for the successor period, from October&nbsp;2, 2006
to December&nbsp;30, 2006. Body Central Corp. had no assets, liabilities or operations prior to the 2006 Transaction and therefore the results for all periods prior to October&nbsp;2, 2006 reflect
results of our predecessors. Due to the significance of the 2006 Transaction, the impact of purchase accounting and the change in our corporate structure that occurred in 2006, the financial
information for all successor periods is not comparable to that of the predecessor periods. As part of the 2006 Transaction, Body Central Corp. also acquired Rinzi Air,&nbsp;LLC, of which Body Shop
of America,&nbsp;Inc.
was the sole member. On March&nbsp;6, 2008, Rinzi Air,&nbsp;LLC transferred its only asset to a third party and on October&nbsp;20, 2010 we dissolved the entity. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Market and Industry Data  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We obtained the industry, market and competitive position data throughout this prospectus from our own internal estimates and research as well as
from industry and general publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been prepared from
sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not
independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the definitions of our market and industry are appropriate,
neither this research nor these definitions have been verified by any independent source. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Trademarks  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Body Central&reg; and Lipstick&reg; are our trademarks and are registered under applicable intellectual property laws. This
prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may
appear without the &reg; or <SUP>TM</SUP> symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our
rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a
relationship with, or endorsement or sponsorship of us by, any other companies. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
some regions of the U.S., our stores are located in the same malls and shopping centers as stores operated by a company doing business under the name The Body Shop&reg;, which are cosmetics
and beauty stores. We are not affiliated with this company. In 1991, we granted this company a license to </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>ii</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>use
our Body Shop trademark which is held by us in connection with retail store services for the sale of women's apparel and apparel accessories. Under the terms of this license agreement, we granted
an exclusive, royalty-free license to the cosmetics and beauty store company to use our "Body Shop" mark for its business as follows: as a service mark for mail order retail sales of
t-shirts and
sweatshirts in 49 states and territories and of other apparel in 38 states and territories; as a service mark for retail store sales of apparel in 38 states and territories; and as a trademark for
apparel in 38 states and territories. This license was non-exclusive as to certain uses and our agreements with this company permit us to continue to use our "Body Shop" mark in our stores located in
Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. We currently operate under the Body Central banner and, in a minority of
stores in certain states, we operate under the Body Shop banner. Our current business is focused on developing the Body Central and Lipstick brands and is moving away from the use of the Body Shop
name for our stores. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>iii</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ca78401_prospectus_summary"> </A>
<A NAME="toc_ca78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  PROSPECTUS SUMMARY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the
information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the "Risk Factors" section of this prospectus and our consolidated
financial statements and related notes appearing at the end of this prospectus, before making an investment decision. Some of the statements in this prospectus constitute forward-looking statements.
See "Special Note Regarding Forward-Looking Statements" for more information.</I></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>We are a holding company and all of our business operations are conducted through our two wholly owned subsidiaries, Body Shop of America,&nbsp;Inc. and Catalogue
Ventures,&nbsp;Inc. Except where the context otherwise requires or where otherwise indicated, the terms "Body Central," "we," "us," "our," "our company" and "our business" refer to Body Central
Corp. and its subsidiaries, Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc., as a combined entity.</I></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Company  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Founded in 1972, Body Central is a growing, multi-channel, specialty retailer offering on-trend, quality apparel and accessories at value prices. We
operate specialty apparel stores under the Body Central and Body Shop banners, as well as a direct business comprised of our Body Central catalog and our e-commerce website at </FONT> <FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT
COLOR="#3B5A6F" SIZE=2>. We target women in their late teens and twenties from diverse cultural backgrounds who seek the latest fashions and a flattering fit. Our
stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under our exclusive Body Central&reg; and Lipstick&reg; labels. We
continually update our merchandise and floor sets with an emphasis on coordinated outfits presented by lifestyle to give our customers a reason to shop our stores frequently. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe our multi-channel strategy supports our brand building efforts and provides us with synergistic growth opportunities across all of our sales channels. As of January&nbsp;1, 2011, we had
209 stores located in fashion retail venues across 23 states in the South, Mid-Atlantic and Midwest. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our History and Recent Accomplishments  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We opened our first Body Shop store in 1973 in Jacksonville, Florida, where our corporate headquarters is located. Our current business is focused on
opening Body Central stores and developing the Body Central and Lipstick brands and on moving away from the use of the Body Shop name for our stores. In October 2006, our founders, members of the
Rosenbaum family, sold a controlling interest in Body Central to a group of outside investors led by WestView Capital Partners, L.P. In October 2010, we completed our initial public offering and our
common stock was listed on The Nasdaq Global Market under the symbol BODY. In recent years, we have completed numerous initiatives that have strengthened our business and positioned us for future
growth, including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Enhanced Executive Team.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We hired a number of executives who
have focused on changes to improve our business, including capitalizing on our competitive advantages, increasing operational discipline, reestablishing the merchandising strategy that was core to our
historical success, expanding our marketing and merchandising teams and enhancing our financial capabilities.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Flexible Test-and-Reorder Business
Model.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In early 2008, we returned to our proven test-and-reorder strategy, which combined with short lead times enables us to react quickly
to the latest fashion trends. Our extensive vendor base provides us with access to a large </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1</FONT></P>

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<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>number
of designers and enables us to have the best selling products in our stores in a timely fashion. This model allows us to maximize full-price sales and reduce our inventory risk. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Refined Real Estate Model.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In 2008, we enhanced our real
estate model by introducing additional structure and analysis to our site selection process. We adhere to our selection methodology and do not pursue expansion opportunities if they do not meet all of
our new store financial and site criteria. Since 2008, our average new store performance outpaced the targeted returns in our store economic model. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Through
initiatives implemented by our executive team since 2008, we have delivered strong results despite the difficult economic environment. For instance, we have: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>maintained positive comparable stores sales growth over the past nine quarters, through the fourth quarter of 2010,
including an increase of 4.9% for fiscal year 2009 and 14.8% for the thirty-nine weeks ended October&nbsp;2, 2010;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>opened six stores in fiscal year 2008, 15 stores in fiscal year 2009 and 27 stores in fiscal year 2010 and from fiscal
2008 through January&nbsp;1, 2011, we also closed 27 stores, most of which were underperforming, for a net increase of 21 stores;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increased inventory turnover resulting in a meaningful reduction in markdowns and an improvement in gross margin by
approximately 190 basis points between fiscal year 2008 and fiscal year 2009;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>improved operating margin by approximately 300 basis points between fiscal year 2008 and fiscal year 2009, primarily as a
result of reduced labor and occupancy costs, resulting in an increase in income from operations to $8.2&nbsp;million for fiscal year 2009 from $2.0&nbsp;million for fiscal year 2008; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increased our net income by $3.7&nbsp;million to $2.8&nbsp;million for fiscal year 2009 from a loss of $952,000 in
fiscal year 2008, and by $5.8&nbsp;million to $7.1&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010, from $1.3&nbsp;million in the thirty-nine weeks ended October&nbsp;3,
2009. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Strengths  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We believe that the following strengths are critical to our continued success: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Established and Differentiated Brand.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With over
35&nbsp;years of operating experience, we have built the Body Central brand around our key strategy of providing the right fashion and quality, with a flattering fit, at a value price. We believe
our core customer is passionate about finding current fashions typically offered in higher-end specialty stores and boutiques at value prices in an exciting store environment. </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Exciting Fashion Delivered at a Compelling Value.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We deliver
a carefully edited selection of quality, fashionable apparel and accessories for most occasions at value prices. Our broad product assortment of apparel, jewelry, accessories and footwear allows our
customers to purchase complete outfits. We do not dictate fashion trends, but respond quickly to offer best selling styles. We believe that by delivering new merchandise to our </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>stores
every day and by updating our floor sets regularly, we are able to drive repeat store visits.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Multiple Sales Channel Synergies.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We complement our retail
stores with a successful direct business, which consists of catalog and e-commerce sales. Our direct business represented approximately 16.8% of our net revenues in fiscal year 2009. We
believe our multi-channel strategy builds brand awareness and drives sales across all of our channels.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Powerful New Store Economics.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have a proven store economic
model that works across a variety of market sizes, demographics, climates, real estate venues and mall classifications. Our flexible store format allows us to adapt to available locations and store
footprints quickly with a low investment cost. On average, our new stores are paying back our investment in less than one year based on net operating cash flows for that store and inclusive of lease
commitments.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Disciplined Inventory Management.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We test the vast majority
of all new merchandise on a limited basis prior to a broader roll out. Our proven test-and-reorder strategy serves as the foundation of our merchandising philosophy and
instills discipline in our inventory management. This strategy, together with our vendors' short production lead times, allows us to respond rapidly to changing trends with appropriate merchandise
levels, thereby minimizing markdowns and inventory&nbsp;risk.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Proven Management Team.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We are led by a proven executive
team. Allen Weinstein, our President and Chief Executive Officer, Beth Angelo, our Chief Merchandising Officer and President of Direct Sales, and Richard Walters, our Chief Financial Officer, lead a
management team that has significant experience in the retail industry, including design, marketing, sourcing, merchandising and real estate. In addition, our regional and district managers average
over 20 and 10 years of experience, respectively. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Growth Strategy  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We believe we are well positioned to take advantage of opportunities to increase revenues, drive net income growth and capture market share
including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Expand Our Store Base.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With only 209 stores in 23 states as
of January&nbsp;1, 2011, we have considerable room to continue to expand in existing and adjacent markets. We opened 27 new stores in fiscal year 2010. We expect to open approximately 30 to 35 new
stores in fiscal year 2011. We believe we can continue to open new stores at an annual rate of 15% for the next several years.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Increase Comparable Store Sales and Enhance Brand
Awareness.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We expect to continue to drive our comparable store sales by keeping our merchandise on-trend, increasing the number of customer
transactions, continuing to provide our distinctive in-store experience and increasing our brand awareness. We believe our ability to test products quickly and to rapidly replenish the
best selling items keeps our shopping experience exciting and drives repeat customer visits.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Expand Operating Margin.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As we grow, we believe we can
improve our operating margin by continuing to leverage our infrastructure and buying power, carefully reviewing </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our
expenses and processes, refining our inventory disciplines, upgrading our information technology and further improving our store operations and labor productivity.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Grow Our Direct Business.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In July 2010, we implemented a new
software system for our direct business. This new system is expected to enhance the potential for growth in our direct business by allowing us to process more orders, offer a more dynamic merchandise
presentation on our website and enhance our marketing efforts by including, among other things, the ability to target specific customer groups. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Recent Developments  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The information presented below for the thirteen weeks ended January&nbsp;1, 2011 is estimated based upon currently available information and is
subject to change. Management has prepared the estimated net revenue, comparable store sales and earnings per share data below in good faith based upon our internal reporting for the thirteen weeks
ended January&nbsp;1, 2011. The information presented below was estimated using significant assumptions, including, among other
things, historical sales return information and inventory valuation data. The estimates represent the most current information available to management since our normal financial closing and financial
statement preparation processes have not been completed and year-end adjustments may occur. As a result, our actual financial results could be different and those differences could be material. The
audit of the fiscal year 2010 consolidated financial statements by our independent registered public accounting firm has not yet been completed. As such, the results are subject to change. However, in
the opinion of management, any adjustments are expected to be of a normal and recurring nature, necessary for a fair presentation of the information presented below. Our consolidated financial
statements for fiscal year 2010 are not expected to be filed with the Securities and Exchange Commission, or the SEC, until after this offering is completed. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net
revenue for the fourth quarter of fiscal 2010 increased 26% to $67.2&nbsp;million compared to $53.2&nbsp;million for the fourth quarter of last year. Comparable store sales increased 15% for
the fourth quarter of 2010 compared to an increase of 7% in the fourth quarter of 2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
expect diluted earnings per share to be in the range of $0.17 to $0.18 for the fourth quarter of fiscal 2010. We expect net income to be between $2.6&nbsp;million and $2.8&nbsp;million for the
fourth quarter of fiscal 2010 compared to the fourth quarter of fiscal 2009, where we reported net income of $1.5&nbsp;million. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Excluding
the non-recurring portion of public company expenses relating to our initial public offering, estimated to be $1.2&nbsp;million, as well as one-time costs related
to the early repayment of debt of $793,000, diluted earnings per share for the fourth quarter of fiscal 2010 are expected to be in the range of $0.25 to $0.26 and net income is expected to range
between $3.9&nbsp;million and $4.1&nbsp;million. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Although
at this time we are unable to provide any additional estimates with respect to our financial position, we have not identified any unusual or unique events or trends that occurred during the
thirteen weeks ended January&nbsp;1, 2011 which might materially affect our results of operations. The final financial results for the thirteen weeks ended January&nbsp;1, 2011 may be different
from the preliminary estimates we are providing above due to completion of our normal quarterly financial close and review procedures and final adjustments. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
preliminary financial data included above has been prepared by, and is the responsibility of, our management. PricewaterhouseCoopers&nbsp;LLP has not audited, reviewed, compiled or performed any </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>procedures
with respect to the accompanying preliminary financial data. Accordingly, PricewaterhouseCoopers&nbsp;LLP does not express an opinion or any other form of assurance with respect thereto. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Core Information Systems  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the fourth quarter of fiscal 2010, we completed the installation of a new upgraded point-of-sale software system with an
off-the-shelf application from a specialty retail store system vendor in all of our stores. We began installing this software in our stores in the third quarter of fiscal 2010.
We believe this new point-of-sale software, combined with our key new systems which support our direct business, which were installed in July 2010, will increase the synergies
between our direct business and our retail stores. To maximize the benefits from these upgrades, we have determined that it will be beneficial to us to continue to invest in our systems so that we are
in a better position to augment our in-store and direct businesses. We expect to spend approximately $375,000 in the first quarter of 2011 as an incremental expenditure to our previous
budget. These additional expenses are primarily related to enhancing the functionality of our recently upgraded systems which support our direct business and point-of-sale
software system. We expect this investment will improve both customer service and our operational efficiency, in addition to enhancing the ability of these systems to interface with our underlying
systems. This additional expenditure is not expected to have an impact on our ability to meet our operating budget for fiscal 2011. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Summary Risk Factors  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business,
financial condition, results of operations, cash flows and prospects. You should carefully consider these risks, including all of the risks discussed in the section entitled "Risk Factors," beginning
on page 12 of this prospectus, before investing in our common stock. Risks relating to our business include, among others: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may not be able to effectively anticipate, identify and respond quickly to changing fashion trends and customer
preferences;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may not be able to execute our growth strategy if we are unable to identify suitable locations to open new stores,
obtain favorable lease terms, attract customers to our stores, hire and retain personnel, maintain sufficient levels of cash flow to support our expansion and/or grow our direct business; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may be adversely impacted by economic conditions, the seasonality of our business and the success of the malls and
shopping centers where our stores are located;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we operate in a highly competitive specialty retail apparel industry and may face increased competition; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may not be able to maintain or improve levels of comparable store sales;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may not be able to maintain and enhance our brand image;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may face disruptions in our information systems; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may not be able to effectively manage our operations, which have grown rapidly, or our future growth;
and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we may lose key personnel. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Principal Stockholders  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Upon the completion of this offering, WestView Capital Partners&nbsp;L.P., or WestView, entities advised by PineBridge Investments, or PineBridge,
and members of the Rosenbaum family (which includes Jerrold Rosenbaum, Beth Angelo and Laurie Bauguss) are expected to own approximately 9.9%, 9.4% and 9.9%, respectively, of our outstanding common
stock, or 8.6%, 8.1% and 8.5%, respectively, if the underwriters' option to purchase additional shares is fully exercised. As a result, WestView, PineBridge and members of the Rosenbaum family may be
able to exert significant voting influence over fundamental and significant corporate matters and transactions. See "Risk Factors&#151;Risks Related to this Offering and Ownership of Our Common
Stock&#151;Concentration of ownership among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions." </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>WestView
is an independent, Boston-based private equity firm focused exclusively on lower middle market companies. WestView manages approximately $500&nbsp;million in assets and makes equity
investments in companies in a variety of growth, buyout, consolidation and recapitalization transactions. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>PineBridge
Investments LLC is an investment adviser registered under the U.S. Investment Advisers Act of 1940, as amended. PineBridge Investments LLC is a member company of PineBridge. PineBridge
provides investment advice and markets asset management products and services to its clients around the world. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Corporate and Other Information  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Body Central Corp. was incorporated in Delaware in 2006. We are a holding company and all of our business operations are conducted through our two
wholly owned subsidiaries, Body Shop of America,&nbsp;Inc., which was incorporated in Florida in 1972, and Catalogue Ventures,&nbsp;Inc., which was incorporated in Florida in 2000. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Office Location  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our principal executive office is located at 6225 Powers Avenue, Jacksonville, Florida 32217, our telephone number is
(904)&nbsp;737-0811 and our fax number is (904)&nbsp;730-0638. Our website address is </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. We do not incorporate
the information contained on, or accessible through, our website into this prospectus, and you should not consider it part of this prospectus. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> The Offering  </B></FONT></P>
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<TD WIDTH="208pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>By Body Central Corp.</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>100,000&nbsp;shares of common stock</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>By the selling stockholders</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,900,000&nbsp;shares of common stock</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Total</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,000,000&nbsp;shares of common stock</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Common stock to be outstanding immediately after this offering</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,505,677&nbsp;shares of common stock</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Over-allotment option</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>750,000&nbsp;shares of common stock</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Use of proceeds</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We intend to use the net proceeds to us from this offering to provide funds for working capital and other general corporate purposes, including the growth of our store base and direct
business. See the "Use of Proceeds" section of this prospectus for more information. We will not receive any proceeds from the sale of shares by the selling stockholders.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Risk factors</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>You should read the "Risk Factors" section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Nasdaq Global Market symbol</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>BODY</FONT></TD>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The number of shares of our common stock to be outstanding after this offering is based on 15,405,677&nbsp;shares of our common stock outstanding as of
January&nbsp;21, 2011 and excludes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,094,094 shares of our common stock issuable upon the exercise of options outstanding as of January&nbsp;21, 2011, at a
weighted average exercise price of $4.45 per share (of which 98,260 shares of our common stock (or 196,516 shares of common stock if the underwriters' over-allotment is exercised in full)
will be issued pursuant to the exercise of vested stock options held by certain of our selling stockholders in order to participate in this offering); and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,646,209 shares of our common stock reserved for future issuance under our Amended and Restated 2006 Equity Incentive
Plan, which we refer to herein as the Plan. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Except
as otherwise indicated, all information in this prospectus assumes no exercise of the underwriters' over-allotment option. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following summaries of our consolidated financial and operating data for the periods presented should be read in conjunction with "Selected
Consolidated Financial and Operating Data," "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the
related notes included elsewhere in this prospectus. Our summary consolidated statement of operations data for the years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2,
2010 have been derived from our audited financial statements included elsewhere in this prospectus. The summary consolidated statement of operations data for the thirty-nine weeks ended
October&nbsp;3, 2009 and October&nbsp;2, 2010 have been derived from our unaudited financial statements included elsewhere in this prospectus. In the opinion of management, the unaudited interim
consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments necessary for the fair presentation of our financial
position and results of operations for these periods. The historical results presented below are not necessarily indicative of the results to be expected for any future period and the results for any
interim period may not necessarily be indicative of the results that may be expected for a full year. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December&nbsp;31st. The reporting
periods contained in our audited financial statements included in this prospectus contain 52&nbsp;weeks of operations in fiscal year 2007, which ended December&nbsp;29, 2007, 53&nbsp;weeks of
operations in fiscal year 2008, which ended January&nbsp;3, 2009, and 52&nbsp;weeks of operations in fiscal year 2009, which ended January&nbsp;2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>See
"Capitalization" and "Use of Proceeds" for more information. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8</FONT></P>

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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirty-Nine Weeks Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(dollars in thousands, except share, per share and operating data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
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<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Statement of Income Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net revenues<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>195,911</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>191,824</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>198,834</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>145,647</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>176,288</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cost of goods sold<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>140,334</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>137,982</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>139,145</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>103,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>118,358</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Gross profit</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 55,577</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>53,842</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>59,689</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>41,969</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>57,930</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>51,832</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>45,555</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>46,567</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,550</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>40,621</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,469</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,357</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,510</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Impairment of long-lived assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,428</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>936</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>196</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,962</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>(Loss) income from operations</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> (38,114</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>1,994</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>8,248</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>4,910</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>13,799</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Interest expense, net of interest income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,215</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,329</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,956</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,985</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,581</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other expense (income), net</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>238</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(493</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(128</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(157</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(105</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>(Loss) income before income taxes</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> (42,567</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(1,842</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>4,420</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>2,073</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>11,323</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>(Benefit from) provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,237</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(890</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>769</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,260</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Net (loss) income</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(39,330</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(952</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>2,780</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>1,304</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>7,063</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income per common share</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(194.10</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5.42</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12.94</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5.86</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34.20</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(194.10</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5.42</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.23</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.11</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.57</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted average common shares outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 12,173,978</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 12,157,584</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 12,447,411</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Pro Forma net income per common share<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.36</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.58</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.35</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.57</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Pro Forma weighted average common shares outstanding<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 14,861,730</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 14,861,730</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 14,963,364</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 15,236,797</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Operating Data (unaudited):</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Revenues:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stores</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>164,411</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>156,924</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>165,331</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>118,800</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>148,980</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Direct</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34,900</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,503</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>26,847</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>27,308</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Net revenues </B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>195,911</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>191,824</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>198,834</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>145,647</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>176,288</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2><B> Stores:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Comparable store sales change<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> (4.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> (8.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Number of stores open at end of period</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>188</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>185</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>179</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>204</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Sales per gross square foot</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>206</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>204</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>207</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>154</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Average square feet per store</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,246</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,283</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,312</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,319</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,289</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total gross square feet at end of period (in&nbsp;thousands)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>798</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>771</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>798</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>773</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>875</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Direct:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Number of catalogs circulated (in thousands)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>20,300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>20,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17,200</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>18,300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Number of pages circulated (in millions)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,088</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,380</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,394</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,244</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Capital expenditures (in thousands)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9,656</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,809</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,725</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,494</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
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 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9</FONT></P>

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<!-- ZEQ.=2,SEQ=17,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=203940,FOLIO='9',FILE='DISK135:[11ZAK1.11ZAK78401]CE78401A.;29',USER='MSULLIV',CD='27-JAN-2011;08:32' -->
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>As of October&nbsp;2, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>As of<BR>
January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Actual </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Pro Forma<BR>
As Adjusted<SUP>(5)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B><BR>
(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance Sheet Data:</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cash and cash equivalents</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,226</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,823</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Working capital</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,967</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,217</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79,209</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>84,398</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Long-term debt, less current portion</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>25,518</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Redeemable preferred stock</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>50,038</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>50,151</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stockholders' (deficit) equity</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(36,891</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(29,586</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Consists
of net sales as well as shipping and handling fees.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Includes
direct cost of purchased merchandise, freight, occupancy, distribution costs, catalog costs, buying costs and inventory shrinkage.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
pro forma net income per common share and pro forma weighted average common shares outstanding has been derived by applying pro forma
adjustments to our historical statements of operations as if this offering as well as our initial public offering were effective January&nbsp;4, 2009. The pro forma net income per common share and
pro forma weighted average common shares outstanding are presented for supplemental informational purposes only. It does not purport to represent what our results of operations would have been had
this offering and our initial public offering actually occurred on January&nbsp;4, 2009.  </FONT>
<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
pro forma adjustment to net income gives effect to the deduction of $2.5&nbsp;million and $1.6&nbsp;million of interest expense, net of income tax benefit, for the fiscal year ended
January&nbsp;2, 2010 and the thirty-nine weeks ended October&nbsp;2, 2010, respectively, related to the repayment of all outstanding indebtedness under our senior credit facility. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
pro forma adjustments to the weighted average common shares outstanding give effect to the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 2,520,616&nbsp;shares of our common stock in our initial public offering used to repay all of our
outstanding indebtedness under our senior credit facility;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 268,770&nbsp;shares of our common stock in our initial public offering used to redeem our
non-convertible, non-voting Series&nbsp;C preferred stock; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock in
connection with our initial public offering. </FONT></DD></DL>
</UL>
</DD></DL>
<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The pro forma adjustments do not give effect to the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 100,000 shares of our common stock in this offering for working capital and general corporate purposes; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 76,924 shares of our common stock in our initial public offering to provide funds for the payment by us
of up to an aggregate of $1.0&nbsp;million to specified employees, including certain named executive officers, under a success bonus plan triggered upon completion of our initial public offering; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 425,641 shares of our common stock in our initial public offering to provide funds for the underwriting
discounts and commissions and estimated offering expenses associated with our initial public offering; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 41,382 shares of our common stock in our initial public offering to provide funds for working capital and
other general corporate purposes, including to grow our store base and our direct business, to convert Body Shop stores to Body Central banners, to refurbish older stores, to make technology
improvements and to make other capital expenditures.
<BR><BR></FONT></DD></DL>
</UL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2><SUP>(4)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
store is included in comparable store sales on the first day of the fourteenth month after a store opens. For fiscal year 2008, which was a
53-week year, sales from the 53rd week were excluded from the calculation. </FONT></DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2><SUP>(5)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Reflects
the balance sheet data as adjusted for the following: </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 100,000 shares of common stock in this offering for working capital and general corporate purposes, at a
public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, which is the midpoint of the price range on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 3,333,333 shares of common stock in our initial public offering at a per share price of $13.00, after
deducting underwriting discounts and commissions and estimated expenses payable by us;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the repayment of all outstanding indebtedness under our senior credit facility using proceeds from our initial public
offering;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the redemption of our non-convertible, non-voting Series&nbsp;C preferred stock using proceeds
from our initial public offering;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock in
connection with our initial public offering; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the payment by us of an aggregate of $1.0&nbsp;million to specified employees, including named executive officers, under
a success bonus plan triggered upon completion of our initial public offering. </FONT></DD></DL>
</UL>
</DD></DL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11</FONT></P>

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</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="de78401_risk_factors"> </A>
<A NAME="toc_de78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  RISK FACTORS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below,
together with all of the other information included in this prospectus, before making a decision to buy our common stock. The trading price of our common stock could decline due to any of these risks,
and, as a result, you may lose all or part of your investment.</I></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Risks Related to Our Business  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our success depends on our ability to anticipate, identify and respond quickly to changing fashion trends, and our failure to respond to changing fashion trends could have a
material adverse effect on our business, financial condition and results of operations.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our core market, apparel and accessories for women in their late teens and twenties, is subject to rapidly shifting fashion trends, customer tastes
and demands. Accordingly, our success is heavily dependent on our ability to anticipate, identify and capitalize on the latest fashion trends and customer demands, including merchandise, styles and
materials that will appeal and be saleable to our customers. A small number of our employees, including our Chief Merchandising Officer and our team of buyers, are primarily responsible for performing
this analysis and making product purchase decisions. Our failure to anticipate, identify or react swiftly to changes in styles, trends or desired image preferences or to anticipate demand is likely to
lead to lower demand for our merchandise, which could cause, among other things, sales declines, excess inventories and a greater number of markdowns. If we do not accurately forecast fashion trends
and sales levels, our business, financial condition and results of operations will be adversely affected. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our growth strategy depends upon our ability to successfully open and operate new stores each year in a timely and cost-effective manner without affecting the
success of our existing store base.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our strategy to grow our business depends partly on continuing to open new stores for the foreseeable future. Our future operating results will
depend largely upon our ability to find a sufficient number of suitable locations that will allow us to successfully open and operate new stores each year in a timely and cost-effective
manner. We believe there are many opportunities to expand our store base from our 209 locations as of January&nbsp;1, 2011. We opened 15 new stores in fiscal year 2009 and 27 new stores in fiscal
2010. In fiscal year 2011, we plan to open approximately 30 to 35 new stores. Our current expansion plans are only targets, and the actual number of new stores we open could differ significantly from
these estimates. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
ability to successfully open and operate new stores depends on many factors including, among others, our ability to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>identify desirable store locations, primarily in regional malls as well as outlet, lifestyle and power centers; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>negotiate acceptable lease terms, including desirable tenant allowances;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>maintain out-of-pocket, build-out costs in line with our store economic model,
including through leveraging landlords' reimbursements for a portion of our construction expenses, as well as managing these costs at reasonable levels;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>hire, train and retain a growing workforce of store managers, sales associates and other personnel; </FONT></DD></DL>
</UL>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>successfully integrate new stores into our existing control structure and operations, including our information technology
systems; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>efficiently expand the operations of our distribution facility to meet the needs of a growing store network. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
near-term expansion plans have us opening new stores in or near the areas where we already have existing stores. As a result, we may face risks associated with market saturation of our
merchandise. Also, if we expand into new geographic areas, we will need to successfully identify and satisfy the fashion preferences of our target customers in these areas. In addition, we will need
to address competitive, merchandising, marketing, distribution and other challenges encountered in connection with any expansion. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Finally,
we cannot assure you that any newly opened stores will be received as well as, or achieve net sales or profitability levels comparable to those of, our existing stores in our estimated time
periods, or at all. If our stores fail to achieve, or are unable to sustain, acceptable net sales and profitability levels, our business may be materially harmed and we may incur significant costs
associated with closing or
relocating stores. If we fail to successfully open and operate new stores and execute our growth plans, the price of our common stock could decline. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our business is sensitive to consumer spending and economic conditions.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Consumer purchases of apparel, accessories and particularly discretionary retail items, including our fashion merchandise, may be adversely affected
by economic conditions such as employment levels, salary and wage levels, the availability of consumer credit, inflation, high interest rates, high tax rates, high fuel prices and consumer confidence
with respect to current and future economic conditions. Consumer purchases may decline during recessionary periods or at other times when unemployment is higher or disposable income is lower. These
risks may be exacerbated for retailers like us that focus significantly on selling discretionary fashion merchandise. Consumer willingness to make discretionary purchases may decline, may stall, or
may be slow to increase due to national and regional economic conditions. Our financial performance is particularly susceptible to economic and other conditions in regions or states where we have a
significant number of stores, such as Florida, Texas, Pennsylvania and Georgia. There remains considerable uncertainty and volatility in the national and global economy. Further or future slowdowns or
disruptions in the economy could adversely affect mall traffic and new mall and shopping center development and could materially and adversely affect us and our growth plans. We may not be able to
maintain our recent rate of growth in net revenues if there is a decline in consumer spending patterns. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We operate in the highly competitive specialty retail apparel industry and the size and resources of some of our competitors may allow them to compete more effectively than
we can, which could impact our ability to grow our business or result in loss of our market share.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We face intense competition in the specialty retail apparel industry. We compete on the basis of a combination of factors, including price, breadth,
quality and style of merchandise, as well as our brand image and ability to respond to fashion trends. While we believe that we compete primarily with specialty retailers, catalog retailers and
Internet businesses that specialize in women's apparel and accessories, we also face competition from department stores and value retailers. We believe our primary competitors include specialty
apparel retailers that offer their own private labels, including Forever 21, Wet Seal, rue21, Charlotte Russe and A&eacute;ropostale, among others. In addition, our expansion into markets
served by our competitors and entry of new competitors or expansion of existing competitors into our markets could have a material adverse effect on our business. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
also compete with a wide variety of large and small retailers for customers, vendors, suitable store locations and personnel. The competitive landscape we face, particularly among specialty
retailers, is subject to rapid change as new competitors emerge and existing competitors change their offerings. We cannot assure you that we will be able to compete successfully and navigate the
shifts in our market. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Many
of our competitors are, and many of our potential competitors may be, larger and have greater name recognition and access to greater financial, marketing and other resources. Therefore, these
competitors may be able to adapt to changes in trends and customer desires more quickly, devote greater resources to the marketing and sale of their products, generate greater brand recognition or
adopt more aggressive pricing policies than we can. In addition, catalog mailings by our competitors may adversely affect response rates to our own catalog mailings. As a result, we may lose market
share, which would reduce our sales and revenues and adversely affect our results of operations. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our inability to maintain or improve levels of comparable store sales could negatively impact our profitability and financial operations.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our recent comparable store sales have been higher than our historical comparable store sales, and we may not be able to sustain or improve these
levels. If our future comparable store sales decline or fail to meet market expectations, our profitability could be harmed and the price of our common stock could decline. In addition, the aggregate
results of our store operations have fluctuated in the past and can be expected to fluctuate in the future. A variety of factors affect comparable store sales, including fashion trends, competition,
current national and regional economic conditions, pricing, changes in our merchandise mix, inventory shrinkage, the success of our marketing programs, holiday timing and weather conditions. In
addition, it may be more challenging for us to sustain high levels of comparable store sales growth during and after the planned expansion of our store base. These factors may cause our comparable
store sales results to be materially lower than in recent periods and lower than market expectations, which could harm our business and our earnings and result in a decline in the price of our common
stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our ability to attract customers to our stores that are located in regional malls and other shopping centers and venues depends heavily on the success of the malls and
centers in which our stores are located, and any decrease in customer traffic could cause our net sales to be less than expected.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our stores are principally located in regional malls, with some in outlet, lifestyle and power centers, and we would expect this to continue as we
grow. Net sales at our stores are derived, to a significant degree, from the volume of traffic in those malls and centers and the surrounding areas. Our stores benefit from the ability of adjacent
tenants to generate consumer traffic near our stores and the continuing popularity of the regional malls and outlet, lifestyle and power centers as shopping destinations. Our sales volume and traffic
may be adversely affected by, among other things, economic downturns nationally or regionally, high fuel prices, increased competition, unfavorable weather conditions, changes in consumer
demographics, a decrease in popularity of malls generally or of particular malls in which our stores are located. A reduction in customer traffic as a result of these or any other factors, or our
inability to obtain or maintain desirable store locations within malls, could have a material adverse effect on our business. In addition, store closings in malls, particularly stores that attract
similar customers, or deteriorations in the financial condition of mall operators could limit their ability to finance our tenant improvements, which would have an adverse impact on our ability to
open profitable stores. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our business largely depends on a strong brand image, and if we are not able to maintain and enhance our brand, particularly in new markets where we have limited brand
recognition, we may be unable to attract a sufficient number of customers to our stores or sell sufficient quantities of our merchandise through our direct business.  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We believe that our brand image and brand awareness has contributed significantly to the success of our business. We also believe that maintaining
and enhancing our brand image particularly in new markets where we have limited brand recognition is important to maintaining and expanding our customer base. Maintaining and enhancing our brand image
may require us to make substantial investments in areas such as merchandising, marketing, store operations, community relations, store graphics, catalog distribution and employee training. These
investments may be substantial and may not ultimately be successful. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
rely on word-of-mouth, foot traffic, catalogs and email blasts to capture the interest of our customers and drive them to our stores and website. We do not use
traditional advertising channels, such as newspapers, magazines, billboards, television and radio, which are used by some of our competitors. We expect to increase our use of social media, such as
Facebook and Twitter, in the future. If our marketing efforts are not successful, there may be no immediately available alternative marketing channel for us to build or maintain brand awareness. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
we execute our growth strategy, our ability to successfully integrate new stores into their surrounding communities, to expand into new markets or to maintain the strength or distinctiveness of our
brand image in our existing markets will be adversely impacted if we fail to connect with our target customer. Failure to successfully market our brand in new and existing markets could harm our
business, results of operations and financial condition. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We recently replaced or are planning to replace several core information technology systems, which might disrupt our operations and cause us to incur significant unexpected
expenses.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the fourth quarter of 2010, we finished the complete replacement of our stores' point-of-sale software system with an
off-the-shelf application from a specialty retail store system vendor. When implementing new technology systems, even an off-the-shelf solution, there is always risk that the
system does not function properly or that other challenges arise that we did not anticipate. There are inherent risks associated with replacing point-of-sale software systems,
including the risk of disruptions that affect our ability to obtain timely and accurate sales information or that cause delays in our ability to service our customers in stores. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>During
July 2010, we replaced key systems which support our direct business, including our sales order, purchase order and warehouse management systems as well as our website and web interface
application. These replacements and upgrades will allow us to handle more orders than our current system and provide a better user experience for our direct customers. In the near-term,
delays and disruptions in order processing and fulfillment resulting from the new website and direct business software replacement could arise, either of which might negatively impact our direct
business in the form of delivery disruptions, reduced sales or reduced access to our website. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
fiscal year 2011, we plan to install a new planning and allocation system for our store business. This system will supplement our existing inventory system, thereby allowing us to manage our
inventory more efficiently. Our existing inventory management system for our store business and our accounting system may need to be upgraded and replaced over time depending on our growth. As
described above, the risks associated with these systems changes could disrupt and adversely impact the promptness and accuracy of our merchandise distribution, transaction processing, financial </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>accounting
and reporting, including the implementation of our internal controls over financial reporting. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe that other companies have experienced significant delays and cost overruns in implementing similar systems changes, and we may encounter problems as well. We may not be able to successfully
implement these new systems or, if implemented, we may still face unexpected disruptions in the future. Any resulting disruptions could harm our business, prospects, financial condition and results of
operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> To support our current growth strategy, we will need to place increasing reliance on our information technology and distribution systems. Any failure, inadequacy or
interruption of our systems could harm our ability to effectively operate our business.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As our operations grow, greater demands will be placed on our information technology, distribution, sales order and inventory management systems. Our
ability to effectively manage and maintain controls and procedures related to financial reporting, to manage and maintain our inventory and to ship products to our stores and our customers on a timely
basis depends to a significant extent on our in-store systems, including our point-of-sale software and inventory management systems, as well as our systems that
enable our direct business through our catalog and website. See "Business&#151;Information Technology Systems" for a more detailed description of our systems and "&#151;We recently
replaced or are planning to replace several core information technology systems, which might disrupt our operations and cause us to incur significant unexpected expenses" for a description of certain
changes to our core systems. To manage the growth of our operations, personnel and real estate portfolio, we will need to continually improve and expand our operational resources, including our
operational and financial systems, transaction processing and internal controls and business processes. In doing so, we would expect to encounter transitional issues that could cause us to incur
substantial additional expenses. The failure of our information systems to operate effectively, problems with transitioning to upgraded or replacement systems or expanding them into new stores or a
breach in security of these systems, could adversely impact the promptness and accuracy of our merchandise distribution, transaction processing, financial accounting and reporting, the efficiency of
our operations and our ability to properly forecast earnings and cash requirements. We cannot anticipate all the demands that will be placed on our systems and we could be required to make significant
additional expenditures to remediate any failure to upgrade, problems or breaches of
our information technology systems, which could have a material adverse effect on our results of operations and business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our current growth plans will place a strain on our existing resources and could cause us to encounter challenges we have not faced before.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As our number of stores and our direct sales grow, our operations will become more complex. While we have grown substantially as a company since
inception, this growth has been over a period of decades. As we move forward, we expect our growth to bring new challenges that we have not faced before. Among other strains, this growth may make it
more difficult for us to adequately predict expenditures, such as real estate and construction expenses, budgeting will become more complex, and we also may place increased burdens on our vendors, as
we will likely increase the size of our merchandise orders. As a result, if new order delivery times lengthen, we could see more fashions arrive after trends have passed, resulting in excess inventory
and greater markdowns. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
addition, our planned expansion is expected to place increased demands on our existing operational, managerial, administrative and other resources. Specifically, our inventory management systems
and personnel processes may need to be upgraded to keep pace with our current growth strategy. We cannot anticipate all of the demands that our expanding operations will impose on our business, and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our
failure to appropriately address these demands could have a material adverse effect on our business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We depend on key personnel and may not be able to retain or replace these individuals or recruit additional personnel, which could harm our business.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We believe that we have benefited substantially from the leadership and experience of our key personnel, including our President and Chief Executive
Officer, Allen Weinstein, our Chief Merchandising Officer, Beth Angelo, and our Chief Financial Officer, Richard Walters. Our employees may terminate their employment with us at any time. The loss of
any of our key personnel could have a material adverse effect on our business, as we may not be able to find suitable individuals to replace them on a timely basis. In addition, any departures of key
management could be viewed in a negative light by investors and analysts, which could cause our common stock price to decline. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
our business expands, our future success will depend greatly on our continued ability to attract and retain highly skilled and qualified personnel. Attracting and retaining experienced and
successful personnel in the retail industry is competitive. If we are not able to meet, hire and retain key members of senior management, our growth strategy and business generally could be impaired. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our business will suffer and our growth strategy may not be successful if we are unable to find and retain store employees that reflect our brand image and embody our
culture.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Like most retailers, we experience significant employee turnover rates, particularly among store employees. Our planned growth will require us to
hire and train even more personnel to manage our expected growth. Our success depends in part upon our ability to continually attract, motivate and retain a sufficient number of store employees who
understand and can represent and appreciate our brand and customers. We compete for qualified personnel with a variety of companies looking to hire for retail positions. Historically, we have prided
ourselves on our commitment to employee growth and development and we focus on promoting from within our team. Our growth plans will strain our ability to staff our new stores, particularly at the
store manager level, which could have an adverse effect on our ability to maintain a cohesive and consistently strong team, which in turn could have an adverse impact on our business. If we are unable
to attract, train, assimilate or retain employees in the future, we may not be able to service our customers effectively, thus reducing our ability to continue our growth and to operate our existing
stores as profitably as we have in the past. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We only have one facility which is both our corporate headquarters and distribution facility and have not yet implemented disaster recovery procedures. If we encounter
difficulties associated with this facility, we could face inventory shortages that would have a material adverse effect on our business operations.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our corporate headquarters and our only distribution facility are located in one facility in Jacksonville, Florida. Our distribution facility
supports both our retail stores and our direct business. All of our merchandise is shipped from our vendors to the distribution facility and then packaged and shipped from our distribution facility to
our stores and our direct customers. Our stores and our direct customers must receive merchandise in a timely manner in order to stay current with the fashion preferences of our customers. While we
believe the size and scale of our distribution center is sufficient to service our growth plans for the foreseeable future, the efficient flow of our merchandise requires that we have adequate
capacity in our distribution facility to support our current level of operations and our growth plans. If we encounter difficulties associated with our distribution facility or if it were to shut down
for any reason, including by fire or other natural disaster, we could face inventory shortages resulting in "out-of-stock" conditions in our stores, and delays in shipments to
our direct customers, resulting in significantly higher costs and longer lead times associated with distributing our </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>merchandise.
In addition, most of our computer equipment and senior management, including critical resources dedicated to merchandising, financial and administrative functions, are located at our
corporate headquarters. Our management and our operations and distribution staff would need to find an alternative location, causing further disruption and expense to our business and operations. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
recognize the need for, and are in the early stages of, developing disaster recovery, business continuity and document retention plans that would allow us to be operational despite casualties or
unforeseen events impacting our corporate headquarters or distribution center. Without disaster recovery, business continuity and document retention plans, if we encounter difficulties or disasters
with our distribution facility or at our corporate headquarters, our critical systems, operations and information may not be restored in a timely manner, or at all, and this would have a material
adverse effect on our business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We are subject to risks associated with leasing substantial amounts of space, including future increases in occupancy costs.  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We do not own any real estate. Instead, we lease all of our store locations, as well as our corporate headquarters and distribution facility in
Jacksonville, Florida. Although our leases range from month-to-month to approximately ten
years, we typically occupy our stores under operating leases with terms of six to ten years. Some of our leases have early termination provisions if we do not achieve specified sales targets after an
initial term, which is typically four years. We believe that we have been able to negotiate favorable rental rates over the last few years due in part to the state of the economy and higher than usual
vacancy rates in a number of regional malls. These trends may not continue and there is no guarantee that we will be able to continue to negotiate such favorable terms. As we expand our store base,
our lease expense and our cash outlays for rent and other related charges will increase. In addition to future minimum lease payments, most of our leases provide for additional rental payments based
upon our achieving specified net sales, and many provide for additional payments associated with common area maintenance, real estate taxes and insurance. In addition, many of our lease agreements
have escalating rent provisions over the initial term. Our substantial occupancy costs could have significant negative consequences, which include: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>requiring that a substantial portion of our available cash be applied to pay our rental obligations, thus reducing cash
available for other purposes;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increasing our vulnerability to general adverse economic and industry conditions; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>limiting our flexibility in planning for, or reacting to changes in, our business or in the industry in which we compete. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
depend on cash flow from operations to pay our lease expenses and to fulfill our other cash needs. If our business does not generate sufficient cash flow from operating activities to fund these
expenses and needs and sufficient funds are not otherwise available to us, we may not be able to service our lease expenses, grow our business, respond to competitive challenges or fund our other
liquidity and capital needs, which would harm our business. If an existing or future store is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations
under the applicable lease including, among other things, paying rent for the balance of the lease term. In addition, if we are not able to enter into new leases or renew existing leases on terms
acceptable to us, this could have an adverse effect on our results of operations. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>18</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our ability to obtain merchandise quickly and at competitive prices could suffer as a result of any deterioration or change in our vendor relationships or their businesses.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We do not own or operate any manufacturing facilities. Instead, we purchase all of our merchandise from third-party vendors. Two of our vendors
accounted for approximately 22% of our purchases in fiscal year 2009, with no single vendor accounting for more than 11% of our purchases. Our business and financial performance depend in large part
on our ability to quickly evaluate merchandise for style and fit and also to test and purchase a wide array of desired merchandise from our vendors at competitive prices and in the quantities we
require. We generally operate without long-term purchase contracts or other contractual guarantees. Rather, we receive and review samples almost daily for fit and fashion evaluation. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
benefits we currently experience from our vendor relationships could be adversely affected if a sufficient number of our vendors: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>choose to stop providing merchandise samples to us or otherwise discontinue selling products to us; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>raise the prices they charge us to a level such that we are unable to sell merchandise at prices that make sense for us
and our customers;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>change pricing terms to require us to pay on delivery or upfront, including as a result of changes in the credit
relationships some of our vendors have with their various lending institutions;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reduce our access to styles, brands and products by entering into broad exclusivity arrangements with our competitors or
otherwise in the marketplace;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>sell similar products to our competitors with similar or better pricing; or  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>initiate or expand sales of apparel and accessories to retail customers directly through their own stores, catalogs or on
the Internet and compete with us directly. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Market
and economic events that adversely impact our vendors could impair our ability to obtain merchandise in sufficient quantities. For instance, in recent months the cost of cotton has increased,
which could cause our vendors to increase their prices and impact the prices we charge and our results of operations. We historically have established good working relationships with many
small- to mid-size vendors that often have more limited resources, production capacities and operating histories. As we grow and need greater amounts of inventory, we may need
to develop new relationships with larger vendors as our current vendors may be unable to supply us with needed quantities. We may not be able to find similar products on the same terms from larger
vendors. If we are unable to acquire suitable merchandise in sufficient quantities and at acceptable prices due to the loss of, or a deterioration or change in our relationship with, our vendors or
events harmful to our vendors occur, it may adversely affect our business and results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> A failure in our e-commerce operations, which are subject to factors beyond our control, could significantly disrupt our business and lead to reduced sales and
reputational damage.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our direct business operations are growing and represent an important part of our business, accounting for approximately 16.8% of our net revenues in
fiscal year 2009. Expanding our direct business is an important part of our growth strategy. In addition to changing consumer preferences and buying trends in e-commerce, we are vulnerable
to certain additional risks and uncertainties associated with Internet sales, including changes in required technology interfaces, website downtime and other technical failures, security breaches and
consumer privacy concerns. During fiscal year 2009, </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>19</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our
e-commerce system suffered a system wide shutdown for a period of approximately six days, resulting in losses to our net revenues. We recently replaced or are planning to replace
several core information technology systems, including the replacement of the key systems which support our direct business. The replacement of these systems might disrupt our operations and cause us
to incur significant expenses as described elsewhere in this prospectus. Our failure to successfully respond to these risks and uncertainties could reduce Internet sales and damage our brand's
reputation. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Many
of the risks relating to our e-commerce operations are beyond our control, such as state initiatives to impose sales tax collection or use tax reporting for Internet sales,
governmental
regulation of the Internet, increased competition from e-commerce retailers offering similar products, online security breaches and general economic conditions specific to the Internet and
e-commerce. Each of these factors could negatively impact our results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> System security risk issues could disrupt our internal operations or information technology systems, and any such disruption could harm our net revenues, increase our
expenses, and harm our reputation, results of operations and stock price. In addition, incidents in which we fail to protect our customers' information against security breaches could result in
monetary damages against us and could otherwise damage our reputation, harm our businesses and adversely impact our results of operations.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Experienced computer programmers and hackers, or even internal users, may be able to penetrate, create systems disruptions or cause shutdowns of our
network security or that of third-party companies with which we have contracted to provide payment processing services. As a result, we could incur significant expenses addressing problems created by
these breaches. This risk is heightened because we collect and store customer information for marketing purposes. Any compromise of customer information could subject us to customer or government
litigation and harm our reputation, which could adversely affect our business and growth. Moreover, we could incur significant expenses or disruptions of our operations in connection with system
failures or data breaches. In addition, sophisticated hardware and operating system software and applications that we buy from third-parties may contain defects in design or manufacture, including
"bugs" and other problems that could unexpectedly interfere with the operation of the systems. The costs to us to eliminate or alleviate security problems, viruses and bugs, or any problems associated
with the outsourced services provided to us, could be significant, and efforts to address these problems could result in interruptions, delays or cessation of service that may impede our sales,
distribution or other critical functions. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
addition, almost all states have adopted breach of data security statutes or regulations that require notification to consumers if the security of their personal information is breached, and at
least one state has adopted regulations requiring every company that maintains or stores personal information to adopt a comprehensive written information security program. Governmental focus on data
security may lead to additional legislative action, and the increased emphasis on information security may lead customers to request that we take additional measures to enhance security. As a result,
we may have to modify our business with the goal of further improving data security, which would result in increased expenses and operating complexity. Lastly, our reputation may be damaged by any
compromise of security, accidental loss or theft of customer data in our possession, which would negatively impact our business, financial condition or results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Hurricanes or other unanticipated catastrophes that result in a disruption of our operations could negatively impact our business.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our corporate headquarters and only distribution center are located at a single facility in Jacksonville, Florida. This single distribution center
receives, stores and distributes merchandise to all of our stores and fulfills all sales for our direct business. Most of our computer equipment and senior management, including critical resources
dedicated to merchandising, financial and administrative functions, are </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>20</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>located
at our corporate headquarters. As described elsewhere in the risk factors in this prospectus, we do not have adequate disaster recovery systems and plans at our corporate headquarters and
distribution facility. As a result, our business may be more susceptible to regional natural disasters and catastrophes than the operations of more geographically diversified competitors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
addition, a substantial number of our stores are located in the southeastern U.S. The southeastern U.S., Florida and other states along the Gulf Coast, in particular, are prone to severe weather
conditions. For example, hurricanes have passed through Florida and other states along the Gulf Coast causing extensive damage to the region. In addition, to the extent that the predictions of some
climate change models prove accurate, there may be significant national and regional physical effects from climate change such as increases in storm intensity and frequency, including hurricanes. An
increase in adverse weather conditions impacting Florida and other states along the Gulf Coast, and the southeastern U.S. generally, could harm our business, results of operations and financial
condition. For instance, our Nashville mall store has been closed since spring 2010 due to flooding in that region and we do not expect to re-open this store until early 2012. In fact, all
of our locations expose us to additional diverse risks, given that natural disasters or other unanticipated catastrophes, such as telecommunications failures, cyber-attacks, fires or terrorist
attacks, can occur anywhere and could cause disruptions in our operations. Extensive or multiple disruptions in our operations, whether at our stores or our corporate headquarters and distribution
center, due to natural disasters or other unanticipated catastrophes could have a material adverse effect on our results of operations. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our net revenues and merchandise fluctuate on a seasonal basis, leaving our operating results particularly susceptible to changes in seasonal shopping patterns, weather and
related risks.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Due to the seasonal nature of the retail industry, we have historically experienced and expect to continue to experience some fluctuations in our net
revenues and net income. Our net revenues are typically higher in the second and fourth quarters. Net revenues generated during the second quarter and the holiday selling season generally contribute
to the relatively
higher second quarter and fourth quarter net income. Net revenues during these periods cannot be used as an accurate indicator of annual results. In addition, net revenues in a period can fluctuate
due to shifts in the timing of holidays. For instance, the Easter holiday will occur during different fiscal quarters from year to year. If for any reason our net revenues were below seasonal norms or
expectations during these quarters, our annual results of operations could be adversely affected. In addition, in order to prepare for the second and fourth quarters, we must order and keep in stock
more merchandise than we carry at other times during the year. This inventory build-up may require us to expend cash faster than is generated by our operations during this period. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
net revenues also fluctuate based on weather patterns. Any unanticipated decrease in demand for our products during these peak shopping periods could require us to sell excess inventory at a
substantial markdown, which could have a material adverse effect on our business, profitability and brand image. In addition, we may experience variability in net revenues as a result of a variety of
other factors, including the timing of new store openings and catalog mailings, store events, other marketing activities, sales tax holidays and the back-to-school selling
season and other holidays, which may cause our results of operations to fluctuate on a quarterly basis and relative to corresponding periods in prior years. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Increases in costs of catalog mailing, paper and printing will affect the cost of our direct business, which will reduce our profitability.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Postal rate increases and paper and printing costs increase our catalog distribution costs and affect the financial results of our direct business.
We rely on discounts from the basic postal rate structure, such as discounts for bulk mailings and sorting by zip code and carrier routes. We are not a party to any long-term contracts for
the supply of paper. Our cost of paper has fluctuated significantly, and our future paper costs are subject to supply and demand forces that we cannot control. Future additional increases in postal
rates or in paper or printing costs could reduce our profitability to the extent that we are unable to pass those increases directly to customers or offset those increases by raising selling prices. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We may suffer risks if our vendors fail to comply with applicable laws, including a failure to use acceptable labor practices, or if our vendors suffer disruptions in their
businesses.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our vendors source the merchandise sold in our stores from manufacturers both inside and outside of the U.S. Although each of our purchase orders is
subject to our vendor manual and requires adherence to accepted labor practices and compliance with labor, immigration, manufacturing safety and other laws, we do not supervise, control or audit our
vendors or the manufacturers that produce the merchandise we sell. The violation of any labor, immigration, manufacturing safety or other laws by any of our vendors or their U.S. and
non-U.S. manufacturers, such as use of child labor, could damage our brand image or subject us to boycotts by our customers or activist groups. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Any
event causing a sudden disruption of manufacturing or imports, including the imposition of additional import restrictions, could interrupt, or otherwise disrupt, the shipment of finished products
to us by our vendors and materially harm our operations. Political and financial instability outside the U.S., strikes, adverse weather conditions or natural disasters that may occur or acts of war or
terrorism in the U.S. or worldwide, may affect the production, shipment or receipt of merchandise. These factors, which are beyond our control, could materially hurt our business, financial condition
and results of operations or may require us to modify our current business practices or incur increased costs. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Changes in laws, including employment laws and laws related to our merchandise, could make conducting our business more expensive or otherwise cause us to change the way we
do business.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are subject to numerous regulations, including labor and employment, truth-in-advertising, consumer protection and zoning
and occupancy laws and ordinances that regulate retailers generally or govern the promotion and sale of merchandise and the operation of stores and warehouse facilities. If these regulations were to
change or were violated by our management, employees or vendors, the costs of certain goods could increase, or we could experience delays in shipments of our goods, be subject to fines or penalties or
suffer reputational harm, which could reduce demand for our merchandise and hurt our business and results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
addition to increased regulatory compliance requirements, changes in laws could make the ordinary conduct of our business more expensive or require us to change the way we do business. Laws related
to employee benefits and treatment of employees, including laws related to limitations on employee hours, immigration laws, child labor laws, supervisory status, leaves of absence, mandated health
benefits or overtime pay, could also negatively impact us, such as by increasing compensation and benefits costs for overtime and medical expenses. Moreover, changes in product safety or other
consumer protection laws could lead to increased costs to us for some merchandise, or additional labor costs associated with readying merchandise for sale. It is often difficult for us to plan and
prepare for potential changes to applicable laws, and future actions or payments related to these changes could be material to us. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We plan to use cash from operations to fund our operations and execute our growth strategy. We may, however, require additional financing and any additional indebtedness
could adversely affect our financial health and impose covenants that limit our business activities.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We plan to open a number of new stores and remodel existing stores as opportunities arise. As we work to grow our business and store base, we will
require cash from operations to pay our lease obligations, build out new store spaces, purchase inventory, pay personnel and further invest in our systems and infrastructure. While we expect a larger
store base to increase net sales, we cannot assure you that we would achieve an increase. Payments under our store leases and the lease of our corporate headquarters and distribution center account
for a significant portion of our operating expenses. </FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
our business does not generate sufficient cash flow from operations to fund our business and growth plans, and sufficient funds are not otherwise available to us from the net proceeds received from
this offering, we may need additional equity or debt financing. If additional equity or debt financing is not available to us on satisfactory terms, our ability to run and expand our business would be
curtailed and we may need to delay, limit or eliminate store openings. Also, we may not have enough cash on hand to fund any operating shortfalls. If we raise additional capital by issuing equity
securities or securities convertible into equity securities, your ownership would be diluted. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Any
borrowings under any future debt financing will require interest payments and need to be repaid or refinanced, and would create additional cash demands and financial risk for us. Diverting funds
identified for other purposes for debt service may impair our liquidity position. If we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance our debt,
dispose of assets or issue equity to obtain necessary funds. We do not know whether we would be able to take any of these actions on a timely basis, on terms satisfactory to us, or at all. Any
indebtedness we might incur in the future may contain covenants that restrict our ability to incur additional debt, pay dividends, make acquisitions or investments or do certain other things that may
impact the value of our common stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> There are claims made against us from time to time that can result in litigation that could distract management from our business activities and result in significant
liability or damage to our brand.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As a growing company with expanding operations, we increasingly face the risk of litigation and other claims against us. Litigation and other claims
may arise in the ordinary course of our business and include employee claims, commercial disputes, intellectual property issues, product-oriented allegations and slip and fall claims. These claims can
raise complex factual and legal issues that are subject to risks and uncertainties and could require significant management time. Litigation and other claims against us could result in unexpected
expenses and liabilities, which could materially adversely affect our operations and our reputation. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We may be unable to protect our trademarks or other intellectual property rights.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We believe that our trademarks are integral to our store design, our direct business and our success in building brand image and loyalty. We have
registered those trademarks that we believe are important to our business with the U.S. Patent and Trademark Office. We cannot assure you that these registrations will prevent imitation of our name,
merchandising concept, store design or private label merchandise or the infringement of our other intellectual property rights by others. In most cases, the apparel and accessories we sell are
purchased on a non-exclusive basis from vendors that also sell to our competitors. Our competitors may seek to replicate aspects of our business strategy and in-store
experience, thereby diluting our experience and adversely affecting our brand and competitive position. Imitation of our name, concept, store design or merchandise in a manner that projects lesser
quality or carries a negative connotation of our brand image could have a material adverse effect on our business, financial condition and results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
some regions of the U.S., our stores are located in the same malls and shopping centers as stores operated by a company doing business under the name The Body Shop&reg;, which operates
cosmetics and beauty stores. While we are not affiliated with this company, in 1991, we granted this company a license to use our Body Shop trademark which is held by us in connection with retail
store services for the sale of women's apparel and apparel accessories. This license was non-exclusive as to certain uses and our agreements with this company permit us to continue to use our "Body
Shop' mark in our stores located in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. While we currently operate under the
Body Central banner, we operate under the Body Shop banner in 61&nbsp;stores in certain states. The use by the cosmetic </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>23</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>and
beauty store of the Body Shop trademark may create confusion between our business and their business and this could affect our brand. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
are not aware of any claims of infringement upon or challenges to our right to use any of our brand names or trademarks in the U.S. Nevertheless, we cannot be certain that the actions we have taken
to establish and protect our trademarks will be adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as a violation of the
trademarks or proprietary rights of others. Although we cannot currently estimate the likelihood of success of any such lawsuit or ultimate resolution of such a conflict, such a controversy could have
a material adverse effect on our business, financial condition and results of operations. If disputes arise in the future, we may not be able to successfully resolve these types of conflicts to our
satisfaction. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Because
we have not registered our trademarks in any foreign countries, international protection of our brand image and the use of these marks could be limited. For instance, we are aware of a company
outside the U.S. that has used our brand name and has a similar logo, image and website for its business. Also, other entities may have rights to trademarks that contain portions of our marks or may
have registered similar or competing marks for apparel or accessories in foreign countries in which our vendors source our merchandise. Our inability to register our trademarks or purchase or license
the right to use our trademarks or logos in these jurisdictions could limit our ability to obtain supplies from less costly markets or penetrate new markets should our business plan change to include
selling our merchandise in those foreign jurisdictions. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We may be subject to liability if we or our vendors infringe upon the trademarks or other intellectual property rights of third parties, including the risk that we could
acquire merchandise from our vendors without the full right to sell it.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>While we do not manufacture and produce apparel and accessories, we may be subject to liability if our vendors infringe upon the trademarks or other
intellectual property rights of third parties. We do not independently investigate whether our vendors legally hold intellectual property rights to the merchandise they manufacture and distribute.
Third parties may bring legal claims, or threaten to bring legal claims, against us that their intellectual property rights are being infringed or violated by our use of intellectual property.
Litigation or threatened litigation could be costly and distract our senior management from operating our business. If we were to be found liable for any such infringement, we could be required to pay
substantial damages and could be subject to injunctions preventing further infringement. In addition, any payments we are required to make and any injunctions with which we are required to comply as a
result of infringement claims could be costly and thereby adversely affect our financial results. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
a third party claims to have licensing rights with respect to merchandise we purchased from a vendor, or if we acquire unlicensed merchandise, we may be obligated to remove this merchandise from
our stores, incur costs associated with this removal if the distributor or vendor is unwilling or unable to reimburse us and be subject to liability under various civil and criminal causes of action,
including actions to recover unpaid royalties and other damages and injunctions. Additionally, we will be required to purchase new merchandise to replace any we remove. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We rely upon independent third-party transportation providers for substantially all of our merchandise shipments.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We currently rely upon independent third-party transportation providers for substantially all of our merchandise shipments, including shipments to
all of our stores and our direct customers. Our use of outside delivery services for shipments is subject to risks, including increases in fuel prices, which would increase our shipping costs, and
employee strikes and inclement weather, which may impact a </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>24</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>shipper's
ability to provide delivery services that adequately meet our shipping needs. If we change shipping companies, we could face logistical difficulties that could adversely impact deliveries
and we would incur costs and expend resources in connection with such change. Moreover, we may not be able to obtain terms as favorable as those received from the independent third-party
transportation providers we currently use, which would increase our costs. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our ability to source our merchandise profitably could be hurt if new trade restrictions are imposed or existing trade restrictions become more burdensome.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We currently purchase all of our inventory from domestic, third-party vendors, who source our merchandise both domestically and internationally.
These vendors, to the extent they obtain apparel and accessories from outside of the U.S., are subject to trade restrictions, including increased tariffs, safeguards or quotas, which could increase
the cost or reduce the supply of merchandise available to us. Under the World Trade Organization Agreement, effective January&nbsp;1, 2005, the U.S. and other World Trade Organization member
countries removed quotas on goods from World Trade Organization members, which in certain instances we believe affords our vendors greater flexibility in importing textile and apparel products from
World Trade Organization countries from which they source our merchandise. However, as the removal of quotas resulted in an import surge from China, the U.S. imposed safeguard quotas on a number of
categories of goods and apparel from China and may impose additional quotas in the future. These and other trade restrictions could have a significant impact on our vendor's sourcing patterns in the
future. The extent of this impact, if any, and the possible effect on our purchasing patterns and costs, cannot be determined at this time. We cannot predict whether any of the countries in which our
vendors' merchandise is currently manufactured or may be manufactured in the future will be subject to additional trade restrictions imposed by the U.S. and foreign governments, nor can we predict the
likelihood, type or effect of any restrictions. Trade restrictions, including increased tariffs or quotas, embargoes, safeguards and customs restrictions against apparel items, as well as U.S. or
foreign labor strikes, work stoppages or boycotts, could increase the cost or reduce the supply of apparel to our vendors, and we would expect the costs to be passed along in increased prices to us,
which could hurt our profitability. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We may be subject to sales tax in states where we operate our direct business, which could have a material adverse effect on our business, financial condition and results of
operations.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Under current state and federal laws, we are not required to collect and remit sales tax in states where we sell through our Internet or catalog
channels. Legislation is pending in some states that may require us to collect and remit sales tax on direct sales or institute use tax reporting. If states pass sales or use tax laws, we may need to
collect and remit current and past sales tax and could face greater exposure to income tax and franchise taxes in these states. Any increase in sales tax or use tax reporting on our Internet sales
could discourage customers from purchasing through our catalog or Internet channels, which could have a material adverse effect on our results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Increases in the minimum wage could have a material adverse effect on our business, financial condition, results of operations and cash flows.  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>From time to time, legislative proposals are made to increase the minimum wage in the U.S., as well as a number of individual states. Wage rates for
many of our employees are at or slightly above the minimum wage. As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage employees, but
also the wages paid to our other hourly employees as well. Any increase in the cost of our labor could have a material adverse effect on our operating costs, financial condition and results of
operations. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>25</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Maintaining and improving our financial controls and the requirements of being a public company may strain our resources, divert management's attention and affect our
ability to attract and retain qualified board members.  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Nasdaq Marketplace Rules. The
requirements of these rules and regulations have significantly increased our legal and financial compliance costs, including
costs associated with the hiring of additional personnel, and made some activities more difficult, time-consuming or costly. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. Public disclosure of our business results and
other company information could make us less competitive in the market place as our competition gains a better understanding of how we do business. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Ensuring that we have adequate
internal financial and accounting controls and procedures in place is a costly and time-consuming effort that needs to be reevaluated frequently. Section&nbsp;404 of the Sarbanes-Oxley
Act requires annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered certified public accounting firm auditing.
The assessment of the effectiveness of our internal control over financial reporting will begin with fiscal year 2011. Both we and our independent certified registered public accounting firm will be
testing our internal controls in connection with the Section&nbsp;404 requirements and could, as part of that documentation and testing, identify material weaknesses, significant deficiencies or
other areas for further attention or improvement. Implementing any appropriate changes to our internal controls may require specific compliance training for our directors, officers and employees,
require the hiring of additional finance, accounting and other personnel, involve substantial costs to modify our existing accounting systems and take a significant period of time to complete. These
changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements
on a timely basis, could increase our operating costs and could materially impair our ability to operate our business. Moreover, effective internal controls are necessary for us to produce reliable
financial reports and are important to help prevent fraud. As a result, our failure to satisfy the requirements of Section&nbsp;404 on a timely basis could result in the loss of investor confidence
in the reliability of our financial statements, which in turn could cause the market value of our common stock to decline. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Risks Related to this Offering and Ownership of Our Common Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Concentration of ownership among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate
decisions.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Upon consummation of this offering, and assuming that no over-allotment shares are sold in this offering, our executive officers, directors and
principal stockholders will beneficially own, in the aggregate, approximately 29% of our outstanding common stock. As a result, these stockholders will be able to exercise significant control over all
matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and approval of corporate transactions and will have significant control over
our management and policies. Of the eight members of our board of directors two are principals of WestView and one member is a managing director of PineBridge. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>WestView
is expected to hold approximately 9.9% of our outstanding common stock, entities advised by PineBridge are expected to hold approximately 9.4% of our outstanding common stock and members of
the Rosenbaum family are expected to hold approximately 9.9% of our outstanding </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>26</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>common
stock, upon completion of this offering and assuming that no over-allotment shares are sold in this offering. As a result of these ownership positions, these stockholders could take actions
that have the effect of delaying or preventing a change-in-control of us or discouraging others from making tender offers for our shares, which could prevent stockholders from
receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. The concentration of voting power among WestView and entities advised by PineBridge may have an
adverse effect on the price of our common stock. The interests of these stockholders may not be consistent with your interests as a stockholder. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the price at which you
purchase them.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Shares of our common stock were sold in our initial public offering in October 2010 at a price of $13.00 per share, and our common stock has
subsequently traded between approximately $12.00 and $21.00 per share. There has been a public market for our common stock for only a short period of time. An active, liquid and orderly market for our
common stock may not be sustained, which could depress the trading price of our common stock. An inactive market may also impair our ability to raise capital by selling shares. In addition, the market
price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>fashion trends and changes in consumer preferences;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular,
in the retail sales environment;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the timing and level of expenses for new store openings and remodels and the relative proportion of our new stores to
existing stores;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the performance and successful integration of any new stores that we open;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the success of our direct business and sales levels;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in our source mix and vendor base;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in key personnel;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>entry into new markets;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our levels of comparable store sales;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>actions and announcements by us or our competitors or significant acquisitions, divestitures, strategic partnerships,
joint ventures or capital commitments;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>inventory shrinkage beyond our historical average rates;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in operating performance and stock market valuations of other retail companies;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>investors' perceptions of our prospects and the prospects of the retail industry;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>fluctuations in quarterly operating results, as well as differences between our actual financial and operating results and
those expected by investors; </FONT></DD></DL>
</UL>
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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the public's response to press releases or other public announcements by us or third parties, including our filings with
the SEC;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>announcements relating to litigation;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; </FONT> <FONT COLOR="#3B5A6F"
SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet
these estimates or failure of those analysts to initiate or maintain coverage of our common stock;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the development and sustainability of an active trading market for our common stock;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>future sales of our common stock by our officers, directors and significant stockholders;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>other events or factors, including those resulting from information technology system failures and disruptions,
hurricanes, war, acts of terrorism, other natural disasters or responses to these events; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in accounting principles. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>These
and other factors may lower the market price of our common stock, regardless of our actual operating performance. As a result, our common stock may trade at prices significantly below the
offering price. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
addition, the stock markets, including The Nasdaq Global Market, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity
securities of many retail companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation,
we could incur substantial costs and our resources and the attention of management could be diverted from our business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could
adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, we will have approximately
15,505,677 shares of common stock outstanding. All of the 5,750,000 shares of common stock sold in our initial public offering are, and the 5,000,000 shares of common stock (or 5,750,000 shares if the
underwriters exercise their option to purchase additional shares in full) sold in this offering will be, freely tradable without restriction under the Securities Act, except for any shares of our
common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the
Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
and each of our officers and directors as well as all of the selling stockholders have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of the shares of
our common stock or securities convertible into or exchangeable for shares of our common stock during the period from the date of this prospectus continuing through the date 90&nbsp;days after the
date of this </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>28</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>prospectus,
without the prior written consent of Piper Jaffray&nbsp;&amp;&nbsp;Co. See "Underwriting" for a more detailed description of the terms of these "lock-up" arrangements. Shares
of common stock subject to these lock-up arrangements may be sold in the public market 90&nbsp;days after the date of this prospectus, subject to applicable volume and other limitations imposed
under federal securities laws. See "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling shares of our common stock after this offering. Sales of a
substantial number of shares in the public market, or the threat of a substantial sale, could cause the market price of our common stock to decrease significantly. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could
constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in
additional dilution to you. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our certificate of incorporation and by-laws contain provisions that may make the acquisition of our company more difficult without the approval of
our board of directors. These provisions, among other things: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>establish a classified board of directors so that not all members of our board of directors are elected at one time; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may
be issued without stockholder approval, and which may include super-majority voting, special approval, dividend or other rights or preferences superior to the rights of the holders of common stock; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our
stockholders;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>provide that our board of directors is expressly authorized to make, alter or repeal our by-laws; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>establish advance notice requirements for nominations for elections to our board of directors or for proposing matters
that can be acted upon by stockholders at stockholder meetings. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>These
anti-takeover provisions and other provisions under Delaware law, together with the concentration of ownership of our common stock discussed above under "Concentration of ownership
among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions," could discourage, delay or prevent a
transaction involving a change-in-control, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for
you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>29</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could
decline.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our
business. If one or more of the analysts who cover us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or
more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> We do not expect to pay any cash dividends for the foreseeable future.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The continued operation and growth of our business will require substantial cash. Accordingly, we do not anticipate that we will pay any cash
dividends on shares of our common stock for the foreseeable future. Because we are a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating
subsidiaries. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, contractual
restrictions relating to indebtedness we may incur, restrictions imposed by applicable law and other factors our board of directors deems relevant. Accordingly, if you purchase shares in this
offering, realization of a gain on your investment will depend on the appreciation of the price of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future
should not purchase our common stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our actual operating results may differ significantly from our guidance.  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>From time to time, we release guidance regarding our future performance that represents our management's estimates as of the date of release. This
guidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and subject to, the assumptions and the other information contained or referred to in the
release. Our guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our independent registered public
accounting firm nor any other independent expert or outside party compiles or examines the guidance and, accordingly, no such person expresses any opinion or any other form of assurance with respect
thereto. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Guidance
is based upon a number of assumptions and estimates that, while presented with numerical specificity, is inherently subject to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. We generally state possible outcomes
as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested
ranges. The principal reason that we release this data is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any
projections or reports published by any such outside analysts or investors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Guidance
is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual
results. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from the guidance and the variations may be
material. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that the data is forecast. In light of the foregoing, investors are
urged to put the guidance in context and not to place undue reliance on it. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Any
failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this prospectus could result in the actual operating results being
different than the guidance, and such differences may be materially adverse. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>30</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="di78401_special_note_regarding_forward-looking_statements"> </A>
<A NAME="toc_di78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This prospectus contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans,
objectives and expectations for our business operations and financial performance and condition. Any statements that are not of historical facts may be deemed to be forward-looking statements. You can
identify these statements by words such as "aim," "anticipate," "assume," "believe," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "potential," "positioned,"
"predict," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current
expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future
performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All of our forward-looking statements are subject to risks
and uncertainties that may cause our actual results to differ materially from our expectations. Factors that may cause such differences include, but are not limited to, the risks described under "Risk
Factors," including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>failure to execute successfully our growth strategy;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in consumer spending and general economic conditions;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in the competitive environment in our industry and the markets we serve, including increased competition from
other retailers;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>failure of our new stores or existing stores to achieve sales and operating levels consistent with our expectations; </FONT> <FONT COLOR="#3B5A6F"
SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the success of the malls and shopping centers in which our stores are located;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our dependence on a strong brand image;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>failure of our direct business to grow consistent with our growth strategy;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>failure of our information technology systems to support our business;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our dependence upon key executive management or our inability to hire or retain additional personnel; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>disruptions in our supply chain and distribution facility;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our indebtedness and lease obligations;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our reliance upon independent third-party transportation providers for all of our product shipments; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>hurricanes, natural disasters, unusually adverse weather conditions, boycotts and unanticipated events; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the seasonality of our business;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increases in costs of fuel, or other energy, transportation or utilities costs and in the costs of labor and employment; </FONT> <FONT
COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the impact of governmental laws and regulations and the outcomes of legal proceedings;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>restrictions imposed by our indebtedness and lease obligations on our current and future operations; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our failure to maintain effective internal controls;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our inability to protect our trademarks or other intellectual property rights; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increased costs as a result of being a public company. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
derive many of our forward-looking statements from our own 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, or cautionary statements, are disclosed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in this prospectus. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary
statements contained in this prospectus as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all
forward-looking statements made in this prospectus in the context of these risks and uncertainties. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This
prospectus also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry
and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties, some of which may not be publicly available.
This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of
uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates. While we believe that these publications, studies and surveys are reliable, we have not
independently verified the data contained in them. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Potential
investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking
statements. These forward-looking statements speak only as of the date of this prospectus. Unless
required by law, we do not intend to update or revise any forward-looking statements publicly to reflect new information or future events or otherwise. You should, however, review the factors and
risks we describe in the reports we will file from time to time with the SEC after the date of this prospectus. See "Where You Can Find More Information." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>32</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="dk78401_use_of_proceeds"> </A>
<A NAME="toc_dk78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  USE OF PROCEEDS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We estimate that our net proceeds from this offering, based on the sale of 100,000 shares of our common stock at an assumed offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting the underwriting discounts and commissions and estimated
offering
expenses payable by us, will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. We intend to use the net proceeds to pay for our expenses incurred in connection with this offering and the balance to
provide funds for
working capital and other general corporate purposes. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
will not receive any proceeds from the sale of shares of our common stock by the selling stockholders. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="dk78401_market_price_of_common_stock"> </A>
<A NAME="toc_dk78401_2"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  MARKET PRICE OF COMMON STOCK    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our common stock has been listed on The NASDAQ Global Market under the symbol BODY since our initial public offering on October&nbsp;14, 2010.
Before then, there was no public market for our common stock. The following table sets forth the high and low sales prices of our common stock per share, as reported by The NASDAQ Global Market. </FONT></P>
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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>High </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Low </B></FONT></TH>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>2010</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2010 Fourth Quarter (beginning October&nbsp;14, 2010)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15.75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11.98</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>2011</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2011 First Quarter (through January&nbsp;26, 2011)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21.30</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14.11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On January&nbsp;26, 2011, the closing price as reported on The NASDAQ Global Market of our common stock was $18.02. As of January&nbsp;10, 2011, we estimate
that we had approximately 18 holders of record of our common stock. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="dk78401_dividend_policy"> </A>
<A NAME="toc_dk78401_3"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  DIVIDEND POLICY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We did not declare or pay dividends on our common stock for our fiscal years 2008, 2009 and 2010. We do not expect to pay dividends on our common
stock for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be retained and used in the operation and growth of our business. Any future
determination to pay dividends will be at the discretion of our board of directors, subject to compliance with applicable law and any contractual provisions, including under agreements for
indebtedness that we may incur, that restrict or limit our ability to pay dividends, and will depend upon, among other factors, our results of operations, financial condition, capital requirements and
other factors that our board of directors deems relevant. Because we are a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which
may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under future indebtedness we may incur. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33</FONT></P>

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</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="dm78401_capitalization"> </A>
<A NAME="toc_dm78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  CAPITALIZATION    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table sets forth our cash, cash equivalents and capitalization as of October&nbsp;2, 2010: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>on an actual basis; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>on a pro forma as adjusted basis to give effect to the following: </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale of 100,000 shares of common stock at an assumed offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share,
which is the
midpoint of the price range on the cover of this prospectus, after the deduction of the underwriting discounts and commissions and the estimated offering expenses payable by us; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the sale by us of 3,333,333 shares of our common stock on October&nbsp;14, 2010 at an initial public offering price of
$13.00 per share, after deducting estimated underwriting discounts, commissions and offering expenses payable by us;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the repayment of all outstanding indebtedness under our senior credit facility;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the redemption of our non-convertible, non-voting Series&nbsp;C preferred stock; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock; </FONT> <FONT
COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the payment by us of up to an aggregate of $1.0&nbsp;million to specified employees, including certain named executive
officers, under a success bonus plan triggered upon completion of our initial public offering;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>an amendment to our certificate of incorporation to increase our authorized capital stock to 150,000,000 shares of common
stock and 5,000,000 shares of undesignated preferred stock; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>a 25.40446 -for- 1 stock split of our common stock, which occurred on October&nbsp;13, 2010. </FONT></DD></DL>
</UL>
</DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
capitalization following the completion of this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read this
table together with our consolidated financial statements and the related notes appearing elsewhere in this prospectus and the sections of this prospectus titled "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Use of Proceeds" and "Selected Consolidated Financial and Operating Data." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34</FONT></P>

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<A NAME="page_dm78401_1_35"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>
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<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="82pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="82pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>As of October&nbsp;2, 2010<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Actual </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Pro Forma<BR>
As Adjusted </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except share and<BR>
per&nbsp;share amounts)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,823</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Long-term debt:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Senior credit facility</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Redeemable preferred stock:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;D, $0.001 par value: no shares authorized, issued or outstanding, actual; no shares authorized,
 no shares issued and outstanding, on a pro forma as adjusted basis<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;C, $0.001 par value: 30,000 shares authorized, issued and outstanding, actual; no shares
authorized, no shares issued and outstanding, on a pro forma as adjusted basis</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,531</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;A, $0.001 par value: 325,000 shares authorized, 308,820 shares issued and outstanding, actual;
no shares authorized, no shares issued and outstanding, on a pro forma as adjusted basis</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;B, $0.001 par value: 175,000 shares authorized, 158,386 shares issued and outstanding, actual;
no shares authorized, no shares issued and outstanding, on a pro forma as adjusted basis</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Undesignated preferred stock, $0.001 par value: no shares authorized, no shares issued or outstanding, actual; 5,000,000
shares authorized, no shares issued and outstanding, on a pro forma as adjusted basis<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stockholders' deficit:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Common stock, $0.001 par value: 19,053,345 shares authorized, 203,235 shares issued and outstanding, actual; 150,000,000
shares authorized, 15,505,677 shares issued and outstanding, on a pro forma as adjusted basis<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Additional paid-in capital</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>531</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accumulated deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(30,117</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total stockholders' (deficit) equity</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(29,586</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total capitalization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>84,398</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Does
not include options to purchase 1,094,094 shares of common stock outstanding under our Plan. Of the 1,094,094 shares of common stock
outstanding under our Plan, 98,260 shares of our common stock (or 196,516 shares of common stock if the underwriters' over-allotment is exercised in full) will be issued pursuant to the
exercise of vested stock options held by certain of our selling stockholders in order to participate in this offering.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>In
exchange for certain letters of credit we approved the conditional authorization of up to 61,000&nbsp;shares of Series&nbsp;D preferred
stock in the event of a draw on those letters of credit. No draw has been made and no shares of Series&nbsp;D preferred stock have ever been authorized or issued as of the date hereof. Since the
credit facility related to these letters of credit was terminated on October&nbsp;20, 2010, no issuance of Series&nbsp;D preferred stock will occur.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
shares of preferred stock that our board of directors have the authority to issue, without further action by our stockholders, in
one or more series under the terms of our certificate of incorporation. See "Description of Capital Stock&#151;Preferred Stock" for more information.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>As
of October&nbsp;2, 2010, the par value of our issued and outstanding common stock was inconsequential. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>35</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="dq78401_selected_consolidated_financial_and_operating_data"> </A>
<A NAME="toc_dq78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following selected consolidated financial data for each of the years ended December&nbsp;29, 2007, January&nbsp;3, 2009, and
January&nbsp;2, 2010, and consolidated balance sheet data as of January&nbsp;3, 2009 and January&nbsp;2, 2010, have been derived from our audited consolidated financial statements and related
notes, which are included elsewhere in this prospectus. The selected consolidated financial data for each of the years ended December&nbsp;31, 2005 and December&nbsp;30, 2006, and the consolidated
balance sheet data as of December&nbsp;31, 2005, December&nbsp;30, 2006 and December&nbsp;29, 2007, have been derived from our audited consolidated financial statements that do not appear in
this prospectus. The selected consolidated income statement data for the thirty-nine weeks ended October&nbsp;3, 2009 and October&nbsp;2, 2010 have been derived from our unaudited consolidated
financial statements and related notes, which are included elsewhere in the prospectus. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;1, 2006, the acquisition by Body Central of all of the outstanding capital stock of Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. was completed. As a result
of this acquisition, Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. became our wholly owned subsidiaries. As a result of the 2006 Transaction, on October&nbsp;2, 2006, we
began a new basis of accounting. As a result of that change in our basis of accounting, the 2006 financial reporting periods presented below include the predecessor period of Body Central reflecting
approximately 39 weeks of operating results of its now
wholly owned subsidiaries from January&nbsp;1, 2006 to October&nbsp;1, 2006 and approximately 13 weeks of operating results for the successor period from October&nbsp;2, 2006 to
December&nbsp;30, 2006. Body Central had no assets, liabilities or operations prior to the 2006 Transaction and therefore the results for all periods prior to October&nbsp;2, 2006 reflect results
of our predecessors. Due to the significance of the 2006 Transaction, the impact of purchase accounting and the change in our corporate structure that occurred in 2006, the financial information for
all successor periods is not comparable to that of the predecessor periods presented in the accompanying table. As part of the 2006 Transaction, Body Central also acquired Rinzi Air,&nbsp;LLC, of
which Body Shop of America,&nbsp;Inc. was the sole member. On March&nbsp;6, 2008, Rinzi Air,&nbsp;LLC, transferred its only asset to a third party and on October&nbsp;20, 2010 we dissolved the
entity. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments
necessary for the fair presentation of our financial position and results of operations for these periods. The consolidated selected financial data set forth below should be read in conjunction with
our consolidated financial statements, the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. The
historical results presented below are not necessarily indicative of the results to be expected for any future period and the results for any interim period may not necessarily be indicative of the
results that may be expected for a full year. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December&nbsp;31st. The reporting
periods contained in our audited financial statements included in this prospectus contain 52&nbsp;weeks of operations in fiscal year 2007, which ended December&nbsp;29, 2007, 53&nbsp;weeks of
operations in fiscal year 2008, which ended January&nbsp;3, 2009, and 52&nbsp;weeks of operations in fiscal year 2009, which ended January&nbsp;2, 2010. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>36</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>
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<TD WIDTH="47pt" style="font-family:times;"></TD>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Predecessor </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Successor </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>39&nbsp;Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirteen&nbsp;Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;31,<BR>
2005<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>September&nbsp;30,<BR>
2006<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;30,<BR>
2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=23 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(in thousands, except share, per share and operating data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Statement of Income Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net revenues<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>171,804</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>136,767</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>51,137</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>195,911</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>191,824</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>198,834</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>145,647</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>176,288</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Cost of goods sold<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>117,289</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>94,323</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>36,226</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>140,334</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>137,982</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>139,145</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>103,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>118,358</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Gross profit</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>54,515</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>42,444</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>14,911</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>55,577</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>53,842</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>59,689</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>41,969</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>57,930</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Selling, general and administrative expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>37,291</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>30,606</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,310</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>51,832</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>45,555</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>46,567</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,550</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>40,621</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,246</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,928</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,044</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,469</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,357</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,510</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Impairment of long-lived assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,428</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>936</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>196</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,962</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Income (loss) from operations</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> 12,978</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>8,910</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1,557</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(38,114</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1,994</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>8,248</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4,901</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>13,799</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Interest expense, net of interest income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(416</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(600</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,174</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,215</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,329</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,956</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,985</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,581</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Other expense (income), net</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>82</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>192</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(145</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>238</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(493</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(128</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(157</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(105</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Income (loss) before income taxes</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> 13,312</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>9,318</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>528</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(42,567</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(1,842</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4,420</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>2,073</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>11,323</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Noncontrolling interest<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,550</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,850</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Provision for (benefit from) income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>223</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>126</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>206</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(3,237</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(890</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>769</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,260</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Net income (loss)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>11,539</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>5,342</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>322</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(39,330</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(952</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>2,780</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1,304</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>7,063</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net income (loss) per common share</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>11.54</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5.34</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.58</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(194.10</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(5.42</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12.94</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5.86</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34.20</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>11.54</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5.34</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.03</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(194.10</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(5.42</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>.23</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.11</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.57</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Weighted average common shares outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,000,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,072,352</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,173,978</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,157,584</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,447,411</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Pro Forma net income per common share<SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.36</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.58</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.35</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.57</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Pro Forma weighted average common shares outstanding<SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,861,730</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,861,730</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,963,364</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>15,236,797</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>37</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Predecessor </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Successor </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>39&nbsp;Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirteen&nbsp;Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;31,<BR>
2005 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>September&nbsp;30,<BR>
2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;30,<BR>
2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Operating Data (unaudited):</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Revenues:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Stores</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>156,180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>117,506</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>44,700</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>164,411</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>156,924</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>165,331</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>118,800</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>148,980</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Direct</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>15,624</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19,261</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6,437</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>31,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34,900</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,503</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,847</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>27,308</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net revenues</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>171,804</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>136,767</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>51,137</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>195,911</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>191,824</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>198,834</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>145,647</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>176,288</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Stores:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Comparable store sales change<SUP>(6)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (9.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (4.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (8.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Number of stores open at end of period</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>163</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>172</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>176</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>188</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>185</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>179</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>204</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Sales per gross square foot</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>237</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>164</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>61</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>206</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>204</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>207</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>154</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Average square feet per store</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,045</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,176</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,246</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,283</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,312</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,319</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,289</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Total gross square feet at end of period (in thousands)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>659</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>717</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>735</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>798</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>771</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>798</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>773</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>875</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Direct:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Number of catalogs circulated (in thousands)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>16,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17,200</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>18,300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Number of pages circulated (in millions)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>612</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>646</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>204</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,088</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,380</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,394</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,244</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Capital expenditures (in thousands)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,876</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,348</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,969</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9,656</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,809</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,725</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,494</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_TABLEWIDTH,"150%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="63pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="47pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="47pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Predecessor </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Successor </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;31,<BR>
2005 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>September&nbsp;30,<BR>
2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;30,<BR>
2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=23 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Balance Sheet Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>25,082</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,309</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9,353</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,372</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,002</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,226</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>706</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,823</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Working capital</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>30,494</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17,588</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,125</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>192</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(2,698</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(1,967</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(3,512</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(1,217</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Total assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>63,967</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>56,326</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>125,385</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>87,390</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>77,727</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>79,209</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>75,527</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>84,398</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Long-term debt, less current portion</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>49,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>43,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>38,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>25,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Redeemable preferred stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>46,620</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>49,738</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>49,888</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>50,038</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>50,001</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>50,151</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Stockholders' equity (deficit)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>39,333</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>29,150</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>719</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(38,701</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(39,689</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(36,891</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(38,498</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(29,586</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Cash Flow Data:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net cash provided by operating activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>18,030</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,713</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,814</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,175</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,220</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>13,018</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,179</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>10,823</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
fiscal year ended December&nbsp;31, 2005 and the thirty-nine weeks ended September&nbsp;30, 2006 do not reflect the 25.40446-for-1
stock split which occurred on October&nbsp;13, 2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Consists
of net sales as well as shipping and handling fees.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Includes
direct cost of purchased merchandising, freight, occupancy, distribution costs, catalog costs, buying costs and inventory shrinkage.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
fiscal year ended December&nbsp;31, 2005 and the 39 weeks ended September&nbsp;30, 2006 includes the operating results of Body Shop
of America, Inc. Following the provisions of Financial Accounting Standards Board guidance, </FONT><FONT COLOR="#3B5A6F" SIZE=1><I>Consolidation of Variable Interest Entities</I></FONT><FONT COLOR="#3B5A6F" SIZE=1>, we have
consolidated the operating results of our noncontrolling interest in Catalogue Ventures, Inc. As a result of the 2006 Transaction, both Body Shop of America, Inc. and Catalogue Ventures, Inc. are
wholly owned subsidiaries.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(5)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
pro forma net income per common share and pro forma weighted average common shares outstanding has been derived by applying pro forma
adjustments to our historical statements of operations as if this offering as well as our initial public offering were effective January&nbsp;4, 2009. The pro forma net income per common share and
pro forma weighted average common shares outstanding are presented for supplemental informational purposes only. It does not purport to represent what our results of operations would have been had
this offering actually occurred on January&nbsp;4, 2009. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>38</FONT></P>

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<!-- ZEQ.=3,SEQ=46,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=902105,FOLIO='38',FILE='DISK135:[11ZAK1.11ZAK78401]DQ78401A.;20',USER='MSULLIV',CD='27-JAN-2011;08:32' -->
<A NAME="page_dq78401_1_39"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:times;"></FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
pro forma adjustment to net income gives effect to the deduction of $2.5&nbsp;million and $1.6&nbsp;million of interest expense, net of income tax benefit, for the fiscal year ended
January&nbsp;2, 2010 and the thirty-nine weeks ended October&nbsp;2, 2010, respectively, related to the repayment of all outstanding indebtedness under our senior credit facility. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
pro forma adjustments to the weighted average common shares outstanding give effect to the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>the sale by us of 2,520,616&nbsp;shares of our common stock in our initial offering used to repay all of our outstanding
indebtedness under our senior credit facility;  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>the sale by us of 268,770&nbsp;shares of our common stock in our initial offering used to redeem our
non-convertible, non-voting Series&nbsp;C preferred stock; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock in
connection with our initial public offering. </FONT></DD></DL>
</UL>
</UL>
<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
pro forma adjustments do not give effect to the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>the sale by us of 100,000&nbsp;shares of our common stock in this offering for working capital and general corporate
purposes;  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>the sale by us of 76,924 shares of our common stock in our initial public offering to provide funds for the payment by us
of up to an aggregate of $1.0&nbsp;million to specified employees, including certain named executive officers, under a success bonus plan triggered upon completion of this offering; </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>the sale by us of 425,641 shares of our common stock in our initial public offering to provide funds for the underwriting
discounts and commissions and estimated offering expenses associated with our initial public offering; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The sale by us of 41,382 shares of our common stock in our initial public offering to provide funds for working capital and
other general corporate purposes, including to grow our store base and our direct business, to convert Body Shop stores to Body Central banners, to refurbish older stores, to make technology
improvements and to make other capital expenditures.
<BR><BR></FONT></DD></DL>
</UL>
</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(6)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>A
store is included in comparable store sales on the first day of the fourteenth month after a store opens. For fiscal year 2008, which was a
53-week year, sales from the 53rd week were excluded from the calculation. </FONT></DD></DL>
 </DIV>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>39</FONT></P>

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<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION<BR>  AND RESULTS OF OPERATIONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>You should read the following discussion and analysis of our financial condition and results of operations together with our
consolidated financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set
forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should
review the "Risk Factors" and "Special Note Regarding Forward-Looking Statements" sections of this prospectus for a discussion of important factors that could cause actual results to differ materially
from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.</I></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>We operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the last Saturday closest to
December&nbsp;31st. The reporting periods contained in the audited financial statements included in this prospectus contain 52&nbsp;weeks of operations in fiscal year 2009, which ended
January&nbsp;2, 2010, 53&nbsp;weeks of operations in fiscal year
2008, which ended January&nbsp;3, 2009, and 52&nbsp;weeks of operations in fiscal year 2007, which ended December&nbsp;29, 2007.</I></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Overview  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Founded in 1972, Body Central is a growing, multi-channel specialty retailer offering on-trend, quality apparel and accessories at value
prices. We operate specialty apparel stores under the Body Central and Body Shop banners, as well as a direct business comprised of our Body Central catalog and our e-commerce website at </FONT> <FONT COLOR="#3B5A6F"
SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. We target women in their late teens and twenties from diverse cultural backgrounds, who seek the latest fashions and a flattering fit.
Our stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under our exclusive Body Central&reg; and Lipstick&reg; labels. We continually
update our merchandise and floor sets with an emphasis on coordinated outfits presented by lifestyle to give our customers a reason to shop our stores frequently. We believe our multi-channel strategy
supports our brand building efforts and provides us with synergistic growth opportunities across all of our sales channels. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
attribute our historical success to our test-and-reorder strategy, which allows us to minimize our inventory risk by testing small quantities in our stores before placing
larger purchase orders for a broader roll out. We also utilize our vendors' short production lead times to increase our speed to market of our successfully tested items. Our Chief Merchandising
Officer, Beth Angelo was integral to the implementation of this strategy during her early tenure. In 2006, the founding family sold a controlling interest in the company to an investor group led by
WestView. Following the transaction, Ms.&nbsp;Angelo transitioned to primarily focus on our direct business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
new Chief Executive Officer and Chief Merchandising Officer were brought in shortly thereafter. Under the direction of this executive team, we underwent a shift away from our
test-and-reorder strategy and our core historical focus of providing the latest trends and moved toward a merchandising strategy focused on offering more basic fashions through
larger, untested inventory purchases. We believe that this strategy shifted our business away from our core customer and resulted in lower sales, excess inventory and higher levels of markdowns during
fiscal year 2007 and the first three quarters of fiscal year 2008. As an example, in the first quarter of 2007, our comparable store sales change was 6.3% and thereafter our comparable store decreased
during 2007 as a result of the shift in our strategy to a comparable stores sales change of (20.5)% in the fourth quarter of 2007. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
January 2008, Ms.&nbsp;Angelo returned to her previous role as Chief Merchandising Officer and reestablished the test-and-reorder merchandising strategy that was core to
our historical success. Over </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>40</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the
course of the following three fiscal quarters, Ms.&nbsp;Angelo restored our historical merchandising strategy, thereby positioning our business for renewed growth, and we saw our comparable
store sales begin to steadily increase quarter over quarter. In fiscal year 2009, our current Chief Executive Officer, Allen&nbsp;Weinstein, joined us to implement additional improvements to our
business and refocus us on executing operational discipline. Under the leadership of our executive team, we have delivered strong results evidenced by, among other things, our nine consecutive
quarters, through the fourth quarter of 2010, of positive comparable store sales and increased net income despite a difficult economic environment. Our strong growth and operating results reflect the
initiatives taken by our management team, as well as the increasing acceptance of our merchandise and brands. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
of January&nbsp;1, 2011, we had 209 stores with an average size of approximately 4,300 square feet. Our stores are located in fashion retail venues in the South, Mid-Atlantic and
Midwest. Since the beginning of fiscal year 2005, we have increased our store base from 162 stores to 209 stores as of January&nbsp;1, 2011. We opened 15 stores in fiscal year 2009 and 27 stores in
fiscal year 2010 (of which 22 were open as of October&nbsp;2, 2010). We have also closed 13 stores, most of which were underperforming, from fiscal year 2009 through January&nbsp;1, 2011, to
enhance our overall store performance. We expect to continue to drive our comparable store sales by keeping our merchandise on-trend, increasing the number of customer transactions,
continuing to provide our distinctive in-store experience and increasing our brand awareness. We believe these initiatives will enhance our operating margins. We also expect to continue to
drive our direct business by leveraging the capabilities of our new direct systems which were implemented during fiscal year 2010. This new technology allows us to process more orders, offer a more
dynamic merchandise presentation on our website and enhance our marketing efforts by including, among other things, the ability to target specific customer groups. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
plan to expand our store base to take advantage of what we believe are a compelling store economic model and significant real estate opportunities. As a result of our first year sales coupled with
low store build-out costs and a low-cost operating model, our stores generate strong returns on investment. Our real estate model includes focusing on enclosed regional malls
and outlet, lifestyle and power centers in small, medium and metropolitan markets. Our new store operating model assumes average store revenue of $850,000 to $1,100,000 in the first 12 months of a
store's operations. Our average net initial cash investment is approximately $100,000, which includes $75,000 of average build-out costs, including equipment and fixtures (net of landlord
contributions), and $25,000 of initial inventory (net of payables). Our new store operating model assumes a less than one year pay back on our investment based on net operating cash flows for that
store and inclusive of lease commitments. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
employ various marketing initiatives to develop and enhance brand recognition and to create and strengthen relationships with customers. Our marketing strategy involves a combination of
store-visual merchandising and signage updates, in-store promotions, distributions of our catalogs,
email campaigns and social networking sites. During July 2010, we launched a redesigned and enhanced website. We expect this new website will increase our ability to effectively market to and expand
our customer base. We also anticipate increasing our customer database through catalog mailings, email blasts and in-store customer sign-up campaigns. We expect these efforts to have a positive effect
on driving our net revenues. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
are in the process of upgrading or have upgraded several of our systems to better position us for future growth. This investment includes an upgrade of our point-of-sale
software system and our systems that support our direct business and we completed the upgrade of the systems that support our direct business in July 2010. We completed our point-of-sale upgrade in
advance of the 2010&nbsp;holiday shopping season. We will continue to evaluate our systems' needs and invest in </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>41</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>infrastructure
as appropriate. We believe these investments will help us drive comparable store sales and new store sales and improve efficiencies in our operating margins. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>While
we believe that our cash position and net cash provided by operating activities will be adequate to finance working capital needs and planned capital expenditures for at least the next
12&nbsp;months, our ability to fund such cash flow needs will depend largely on our future operating performance. Accordingly, our growth strategies may be limited by our future operating
performance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe our business strategy will continue to offer significant opportunities, but it also presents risks and challenges. These risks and challenges include, but are not limited to, that we may
not be able to to effectively anticipate, identify and respond to changing fashion trends, or that we may not be able to find desirable locations for new stores or that we may not be able to
effectively manage our operations, which have grown rapidly. See "Risk Factors" for other important factors that could impact us. We seek to ensure that addressing these risks does not divert our
management's attention from continuing to build on the strengths that we believe have driven the growth of our business. We believe our focus on enhancing the desirability of our fashions, improving
our in-store shopping experience and upgrading our catalog and website capabilities, all while maintaining our customer service, will be integral to our ongoing growth. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> How We Assess the Performance of Our Business  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In assessing the performance of our business, we consider a variety of operational and financial measures. The key measures for determining how our
business is performing are net revenues, comparable store and non-comparable store sales, direct sales through
our catalog and e-commerce channels, gross profit margin and selling, general and administrative expenses. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Net Revenues  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net revenues consist of sales of our merchandise from comparable stores and non-comparable stores, and direct sales through our catalog
and e-commerce channels, including shipping and handling fees charged to our customers. Net revenues from our stores and direct business reflect sales of our merchandise less estimated
returns and merchandise discounts. </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Store Sales  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>There may be variations in the way in which some of our competitors and other apparel retailers calculate "comparable" or "same store" sales. We
include a store in comparable store sales on the first day of the fourteenth month after a store opens. Non-comparable store sales include sales not included in comparable store sales (for
example, the first two months of a new store's sales) and sales from closed stores. Measuring the change in year-over-year comparable store sales allows us to evaluate how our
store base is performing. Various factors affect comparable store sales, including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>consumer preferences, buying trends and overall economic trends;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our ability to identify and respond effectively to fashion trends and customer preferences;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in competition;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in our merchandise mix;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>changes in pricing levels and average unit price;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the timing of our releases of new merchandise; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>42</FONT></P>

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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the level of customer service that we provide in our stores;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our ability to source and distribute products efficiently; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the number of stores we open and close in any period. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Opening
new stores is an important part of our growth strategy. We expect a significant percentage of our net revenues to come from non-comparable store sales. Accordingly, comparable
store sales is only one element we use to assess the success of our growth strategy. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Purchases
of apparel and accessories are sensitive to a number of factors that influence the levels of consumer spending, including economic conditions and the level of disposable consumer income,
consumer debt, interest rates and consumer confidence. Our business is somewhat seasonal and as a result, our revenues fluctuate. In addition, our revenues in any given quarter can be affected by
timing of holidays, the weather and similar matters. </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Direct Sales  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We offer direct sales through our catalogs and through our e-commerce website, </FONT> <FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, which accepts orders directly from our
customers. We believe the circulation of our catalogs and access to our website increases our
reputation and brand recognition with our target customers and helps support the strength of our store operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Gross Profit  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Gross profit is equal to our net revenues minus our cost of goods sold. Gross profit margin measures gross profit as a percentage of our net
revenues. Cost of goods sold includes the direct cost of purchased merchandise, distribution costs, all freight costs incurred to ship merchandise to our stores and our direct customers, costs
incurred to produce and distribute our catalogs, store occupancy costs, buying costs and inventory shrinkage. The components of our cost of goods sold may not be comparable to those of other
retailers. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
cost of goods sold is greater in higher volume periods because cost of goods sold generally increases as net revenues increase. Changes in the mix of our products, such as changes in the
proportion of accessories, may also impact our cost of goods sold. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and take appropriate
markdowns to clear these goods. The timing and level of markdowns are not seasonal in nature, but are driven by customer acceptance of our merchandise. If we misjudge sales levels and/or trends, we
may be faced with excess inventories and be required to mark down our prices for those products in order to sell them. Significant markdowns have reduced our gross profit in some prior periods and may
do so in future periods. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Selling, General and Administrative Expenses  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include payroll and other
expenses related to operations at our corporate headquarters and store operations. These expenses do not generally vary proportionally with net revenues. As a result, selling, general and
administrative expenses as a percentage of net revenues are usually higher in lower volume periods and usually lower in higher volume periods. The components of our selling, general and administrative
expenses may not be comparable to those of other retailers. We expect that our selling, general and administrative expenses will increase in future periods due to our continuing store growth,
continuing growth in our direct business and, in part, due to additional legal, accounting, insurance and other expenses that we expect to incur as a result of recently </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>43</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>becoming
a public company. Among other things, compliance with the Sarbanes-Oxley Act and related rules and regulations have and are expected to continue to result in significant additional legal and
accounting costs. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Results of Operations  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of
revenues: </FONT></P>
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<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year Ended </B></FONT></TH>
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<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net revenues</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>195,911</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>191,824</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>198,834</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>145,647</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>176,288</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Cost of goods sold</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>140,334</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>137,982</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>139,145</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>103,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>118,358</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Gross profit</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> 55,577</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>53,842</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>59,689</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>41,969</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>57,930</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Selling, general and administrative expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>51,832</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>45,555</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>46,567</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,550</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>40,621</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,469</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,357</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,510</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Impairment of long-lived assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,428</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>936</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>196</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,962</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>(Loss) income from operations</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> (38,114</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1,994</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>8,248</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4,901</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>13,799 </B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Interest expense, net of interest income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,215</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,329</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,956</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,985</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,581</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Other expense (income), net</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>238</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(493</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(128</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(157</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(105</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>(Loss) income before income taxes</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(42,567</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(1,842</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,420</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,073</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>11,323</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>(Benefit from) provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(3,237</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(890</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>769</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,260</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Net (loss) income</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(39,330</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(952</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>2,780</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1,304</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>7,063 </B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Operating Data (unaudited):</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Stores:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Comparable store sales change</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (4.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (8.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Number of stores open at end of period</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>188</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>185</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>179</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>204</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Sales per gross square foot (</FONT><FONT COLOR="#3B5A6F" SIZE=1><B>in whole dollars</B></FONT><FONT COLOR="#3B5A6F"
SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>206</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>204</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>207</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>154</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Total gross square feet at end of period (</FONT><FONT COLOR="#3B5A6F" SIZE=1><B>in thousands</B></FONT><FONT
COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>798</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>771</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>798</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>773</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>875</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Direct:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Number of catalogs circulated (in thousands)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>16,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17,200</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>18,300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Number of pages circulated (in millions)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,088</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,380</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,394</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,244</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Percentage of Revenues:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net revenues</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>100.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Cost of goods sold</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>71.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>71.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>70.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>71.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>67.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Gross profit</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> 28.4</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>28.1</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>30.0</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>28.8</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>32.9</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Selling, general and administrative expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Impairment of long-lived assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>(Loss) income from operations</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> (19.4</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1.1</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4.1</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>3.4</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>7.8 </B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Interest expense, net of interest income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Other expense (income), net</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(0.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(0.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(0.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(0.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>(Loss) income before income taxes</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> (21.7</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(0.9</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>2.2</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1.4</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>6.4</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>(Benefit from) Provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(1.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(0.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Net (loss) income</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(20.1</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)%</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> (0.5</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>)%</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>1.4</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>0.9</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4.0</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>% </B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We have determined our operating segments on the same basis that we use internally to evaluate performance. Our operating segments are our stores and our direct
business, which have been aggregated into one reportable financial segment. We aggregate our operating segments because they have a similar class of customer, nature of products, nature of production
process and distribution methods, as well as similar economic characteristics. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>44</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=52,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=241591,FOLIO='44',FILE='DISK135:[11ZAK1.11ZAK78401]DS78401A.;15',USER='MSULLIV',CD='27-JAN-2011;08:32' -->
<A NAME="page_ds78401_1_45"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
summary of revenues by sales channel is set forth below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_TABLEWIDTH,"110%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="110%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(dollars in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Revenues</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Store</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>164,411</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>156,924</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>165,331</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>118,800</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>148,980</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Direct</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>31,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,503</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,847</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>27,308</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Net revenues</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>195,911</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>191,824</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>198,834</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>145,647</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>176,288</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table summarizes the number of stores open at the beginning of the period and at the end of the period: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_TABLEWIDTH,"110%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="110%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="51pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Thirty-Nine<BR>
Weeks Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Number of stores open at beginning of period</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>176</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>188</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>185</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>New stores</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>15</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>22</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Store closings</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(14</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(10</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
</TR>
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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Number of stores open at end of period</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B> 188</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>180</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>185</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>179</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>204</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
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<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
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 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Comparison of the Thirty-Nine Weeks Ended October&nbsp;2, 2010 Compared to the Thirty-Nine Weeks Ended October&nbsp;3, 2009  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Net Revenues  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net revenues increased by $30.6&nbsp;million, or 21.0%, to $176.3&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010
from $145.6&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009. This increase resulted from an increase in non-comparable store sales and comparable store
sales in addition to a slight increase in our direct sales as further described below. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Store
sales increased $30.2&nbsp;million, or 25.4%, to $149.0&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010 from $118.8&nbsp;million for the
thirty-nine weeks ended October&nbsp;3, 2009. The increase in store sales resulted in part from a 25.5% increase in the number of customer transactions, driven in part by 25 new store
openings, net of store closings, since October&nbsp;3, 2009, partially offset by a decline in the average number of items per sale. Comparable store sales increased $16.7&nbsp;million, or 14.8%,
for the thirty-nine weeks ended October&nbsp;2, 2010 compared to an increase of 4.3% for the thirty-nine weeks ended October&nbsp;3, 2009. Non-comparable store
sales increased $13.5&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010 compared to the thirty-nine weeks ended October&nbsp;3, 2009. There were 167
comparable stores and 37 non-comparable stores open at October&nbsp;2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Direct
sales, including shipping and handling fees, from our direct business increased $461,000, or 1.7%, to $27.3&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010
from $26.8&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009, due to an increase in the number of catalogs circulated offset by a decrease in average revenue per
catalog. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Gross Profit  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Gross profit increased $16.0&nbsp;million, or 38.0%, to $57.9&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010
from $42.0&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009. As a percentage of net revenues, gross profit margin increased by 410 basis points, to 32.9%, for the
thirty-nine weeks ended October&nbsp;2, 2010 from 28.8% for the thirty-nine weeks ended October&nbsp;3, 2009. This increase </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>45</FONT></P>

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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>was
attributable to a 120 basis point increase in merchandise margin, due primarily to decreased markdowns, and a 290 basis point decrease in freight costs, store occupancy, distribution and buying
costs as a percentage of net revenues, due primarily to an increase comparable store sales and a favorable change in store occupancy costs per store. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Selling, General and Administrative Expense  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses increased by $7.1&nbsp;million, or 21.1%, to $40.6&nbsp;million for the thirty-nine
weeks ended October&nbsp;2, 2010 from $33.6&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009. This increase resulted in part from a $3.5&nbsp;million increase in
store operating expenses due to our store growth. As a percentage of net revenues, store operating expenses decreased to 17.3% for the thirty-nine weeks ended October&nbsp;2, 2010 from
18.5% for the thirty-nine weeks ended October&nbsp;3, 2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>General
and administrative expenses increased $3.6&nbsp;million primarily related to payroll, payroll-related expenses and professional fees, including fees associated with the implementation of
certain information technology systems, including a new point-of-sale software system. As a percentage of net revenues, general and administrative expenses increased to 5.7%
for the thirty-nine weeks ended October&nbsp;2, 2010 from 4.5% for the thirty-nine weeks ended October&nbsp;3, 2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
a percentage of net revenues, selling, general and administrative expenses was 23.0% for both the thirty-nine weeks ended October&nbsp;2, 2010 and thirty-nine weeks ended
October&nbsp;3, 2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Depreciation and Amortization Expense  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization decreased $8,000, or 0.2%, to $3.5&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010
from $3.5&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009. As a percentage of net revenues, depreciation and amortization decreased 40 basis points to 2.0% for the
thirty-nine weeks ended October&nbsp;2, 2010 from 2.4% for the thirty-nine weeks ended October&nbsp;3, 2009, as a result of an increase of our comparable store sales. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Interest Expense, Net of Interest Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Interest expense, net of interest income, decreased by $404,000, or 13.5%, to $2.6&nbsp;million for the thirty-nine weeks ended
October&nbsp;2, 2010 from $3.0&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009, which reflects our lower average borrowings under our senior credit facility for the
thirty-nine weeks ended October&nbsp;2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Provision for Income Taxes  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Provision for income taxes increased $3.5&nbsp;million to $4.3&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010
from $769,000 for the thirty-nine weeks ended October&nbsp;3, 2009, which was attributable to a $9.3&nbsp;million increase in income before income taxes in addition to the effective
tax rate increase of 50 basis points to 37.6% for the thirty-nine weeks ended October&nbsp;2, 2010 from 37.1% for the thirty-nine weeks ended October&nbsp;3, 2009 due
primarily to reduced tax credits expected to be utilized to reduce our fiscal year 2010 income tax liability. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Net Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net income increased $5.8&nbsp;million to $7.1&nbsp;million for the thirty-nine weeks ended October&nbsp;2, 2010 from
$1.3&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009 due to the factors discussed above. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>46</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Comparison of Fiscal Year 2009 to Fiscal Year 2008  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Net Revenues  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net revenues increased $7.0&nbsp;million, or 3.7%, to $198.8&nbsp;million in fiscal year 2009 from $191.8&nbsp;million in fiscal year 2008,
which included an additional 53rd&nbsp;week. This 53rd&nbsp;week contributed $3.6&nbsp;million in additional revenue in fiscal year 2008. The overall increase in revenues resulted from an
increase in non-comparable store sales and an increase in comparable store sales, partially offset by a decrease in our direct sales as further described below. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Store
sales increased $8.4&nbsp;million, or 5.4%, to $165.3&nbsp;million in fiscal year 2009 from $156.9&nbsp;million in fiscal year 2008. This increase in revenues from store sales was
primarily attributable to a 5.2% increase in the number of customer transactions, driven in part by five new store openings, net of store closings, since January&nbsp;3, 2009, and an increase in the
average number of items per sale. Comparable store sales increased $7.2&nbsp;million, or 4.9%, in fiscal year 2009 compared to an 8.0% decrease in comparable store sales in fiscal year 2008.
Non-comparable store sales increased $1.2&nbsp;million in fiscal year 2009 compared to fiscal year 2008. There were 164&nbsp;comparable stores and 21 non-comparable stores open at
January 2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Direct
sales, including shipping and handling fees, from our direct business decreased $1.4&nbsp;million, or 4.0%, to $33.5&nbsp;million in fiscal year 2009 from $34.9&nbsp;million in fiscal
year 2008, primarily as a result of a temporary failure in the system for our direct business in June 2009, and resulting loss of customer sales data, which prevented us from fulfilling existing and
new sales orders. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Gross Profit  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Gross profit increased $5.8&nbsp;million, or 10.9%, to $59.7&nbsp;million in fiscal year 2009 from $53.8&nbsp;million in fiscal year 2008. As a
percentage of revenues, gross profit margin increased by 1.9%, to 30.0%, in fiscal year 2009 from 28.1% for fiscal year 2008. This increase was a result of a 70 basis point increase in the merchandise
margin and a 1.2% decrease in freight costs, store occupancy, distribution and buying costs. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Selling, General and Administrative Expenses  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses increased $1.0&nbsp;million, or 2.2%, to $46.6&nbsp;million in fiscal year 2009 from
$45.6&nbsp;million in fiscal year 2008. Store operating expenses increased by $1.4&nbsp;million due to our store growth. As a percentage of revenues, store operating expenses were 18.7% for both
fiscal years. General and administrative expenses decreased $376,000 primarily as a result of a reduction in professional fees, partially offset by an increase in payroll and payroll-related expenses.
As a percentage of revenue, general and administrative expenses decreased 40 basis points to 4.7% in fiscal year 2009 from 5.1% in fiscal year 2008. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
a percentage of revenues, selling, general and administrative expenses decreased 30 basis points to 23.4% for fiscal year 2009 from 23.7% for fiscal year 2008, as a result of the above factors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Depreciation and Amortization  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization decreased $679,000, or 12.7%, to $4.7&nbsp;million in fiscal year 2009 from $5.4&nbsp;million in fiscal year 2008.
As a percentage of revenues, depreciation and amortization decreased 40 basis points to 2.4% in fiscal year 2009 from 2.8% in fiscal year 2008. This decrease was a result of an adjustment for
impairment of long-lived assets during the fourth quarter of fiscal year 2008 partially offset by depreciation and amortization on new capital expenditures. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>47</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Impairment of Long-Lived Assets  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Impairment of long-lived assets was $196,000 for fiscal year 2009 and $936,000 for fiscal year 2008, related to fair value adjustments on
the carrying value of store assets. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Interest Expense, Net of Interest Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Interest expense, net of interest income, decreased by $373,000, or 8.6%, to $4.0&nbsp;million in fiscal year 2009 from $4.3&nbsp;million in
fiscal year 2008. This decrease reflects our lower average outstanding debt resulting from quarterly payments under our senior credit facility in the amount of $5.0&nbsp;million in fiscal year 2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> (Benefit from) Provision for Income Taxes  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(Benefit from) provision for income tax increased $2.5&nbsp;million to a provision of $1.6&nbsp;million in fiscal year 2009 from an income tax
benefit of $890,000 for fiscal year 2008. This increase was attributable to a $6.3&nbsp;million increase in income before income taxes partially offset by the effective tax rate decrease to 37.1%
for fiscal year 2009 from a tax benefit of 48.3% in fiscal year 2008. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Net (Loss) Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income increased $3.7&nbsp;million to net income of $2.8&nbsp;million in fiscal year 2009 from a net loss of $952,000 in fiscal year
2008 due to the factors discussed above. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Comparison of Fiscal Year 2008 to Fiscal Year 2007  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Net Revenues  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net revenues decreased $4.1&nbsp;million, or 2.1%, to $191.8&nbsp;million in fiscal year 2008, which included an additional 53rd&nbsp;week
ended on January&nbsp;3, 2009, from $195.9&nbsp;million in fiscal year 2007. This 53rd&nbsp;week contributed $3.6&nbsp;million in additional revenue in fiscal year 2008. The overall decrease
in revenues resulted from a reduction in comparable store sales partially offset by an increase in non-comparable store sales and an increase in our direct sales as further described
below. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Store
sales decreased $7.5&nbsp;million, or 4.6%, to $156.9&nbsp;million in fiscal year 2008 from $164.4&nbsp;million in fiscal year 2007. The decrease in store sales was driven in part by eight
store closings, net of store openings, since December&nbsp;29, 2007, partially offset by an increase in the average number of items per sale and an increase of 40&nbsp;basis points in the number
of customer transactions. Comparable store sales decreased $12.2&nbsp;million, or 8.0%, in fiscal year 2008 compared to a 4.7% decrease in fiscal year 2007.
Non-comparable store sales increased $4.7 million in fiscal year 2008 compared to fiscal year 2007. There were 159 comparable stores and 21 non-comparable stores open at January&nbsp;3,
2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Direct
sales, including shipping and handling fees, from our direct business increased $3.4&nbsp;million, or 10.8%, to $34.9&nbsp;million in fiscal year 2008 from $31.5 million in fiscal year
2007. This increase was due to an expanded distribution of our catalogs and an increase in our customer base resulting from our efforts to increase brand awareness partially offset by a decrease in
revenue per book. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Gross Profit  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Gross profit decreased $1.7&nbsp;million, or 3.1%, to $53.8&nbsp;million in fiscal year 2008 from $55.6&nbsp;million in fiscal year 2007. As a
percentage of revenues, gross profit margin decreased 30 basis points to 28.1% in fiscal year 2008 from 28.4% for fiscal year 2007. This decrease was a result of a 1.6% increase in freight, store
occupancy, distribution and buying costs partially offset by a 1.3% increase in the merchandise margin. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>48</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Selling, General and Administrative Expenses  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses decreased $6.3&nbsp;million, or 12.1%, to $45.6&nbsp;million in fiscal year 2008 from
$51.8&nbsp;million in fiscal year 2007. Store operating expenses decreased $2.4&nbsp;million due to the number of stores closed in fiscal year 2008. As a percentage of revenues, store operating
expenses decreased to 18.7% in fiscal year 2008 from 19.5% in fiscal year 2007. General and administrative expenses decreased $3.9&nbsp;million primarily as a result of a reduction in payroll and
payroll-related expenses, travel and relocation expenses and temporary employees. As a percentage of revenues, general and administrative expenses decreased by 1.9% to 5.1% in fiscal year 2008 from
7.0% in fiscal year 2007. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
a percentage of revenues, selling, general and administrative expenses decreased by 2.8% to 23.7% for fiscal year 2008 as compared to 26.5% in fiscal year 2007, as a result of the above factors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Depreciation and Amortization  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization decreased $112,000, or 2.0%, to $5.4&nbsp;million in fiscal year 2008 from $5.5&nbsp;million in fiscal year 2007.
Depreciation and amortization as a percentage of revenues remained constant at 2.8% in fiscal years 2008 and 2007. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Impairment of Long-Lived Assets  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Impairment of long-lived assets was $936,000 for fiscal year 2008 and $2.4&nbsp;million in fiscal year 2007 related to fair value
adjustments on the carrying value of store assets. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Goodwill Impairment  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Goodwill impairment of $34.0&nbsp;million was recorded in fiscal year 2007 related to our store operations as a result of the slowing economy,
repositioning of our merchandise strategy, competition with other retailers and operating performance of the stores. See the discussion in "&#151;Overview" for further understanding of changes
that led to the goodwill impairment of our store operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Interest Expense, Net of Interest Income  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Interest expense, net of interest income, increased $114,000, or 2.7%, to $4.3&nbsp;million in fiscal year 2008 from $4.2&nbsp;million in fiscal
year 2007, which was attributable to an increase in the weighted average borrowings under our senior credit facility. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Benefit from Income Taxes  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Benefit from income taxes benefit decreased $2.3&nbsp;million to $890,000 in fiscal year 2008 from $3.2&nbsp;million in fiscal year 2007. This
was attributable to a $40.7&nbsp;million reduction in losses before income tax offset by the effective tax benefit increase to 48.3% in fiscal year 2008 from a 7.6% benefit in fiscal year 2007. The
effective tax benefit was lower for fiscal year 2007 as a result of the impairment of $34.0&nbsp;million of goodwill, which was not deductible for income tax purposes. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Net loss  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net loss decreased $38.4&nbsp;million, or 97.6%, to a net loss of $952,000 in fiscal year 2008 from a net loss of $39.3&nbsp;million in fiscal
year 2007 due to the factors discussed above. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>49</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=57,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=547126,FOLIO='49',FILE='DISK135:[11ZAK1.11ZAK78401]DT78401A.;21',USER='MSULLIV',CD='27-JAN-2011;10:13' -->
<A NAME="page_dt78401_1_50"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Quarterly Results and Seasonality  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table sets forth our historical unaudited quarterly results of operations as well as certain operating data for each of our most recent
eleven fiscal quarters expressed as a percentage of our revenues. This unaudited quarterly information has been prepared on the same basis as our annual audited financial statements appearing
elsewhere in this prospectus, and includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary to present fairly the financial information for the fiscal
quarters presented. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
quarterly data should be read in conjunction with our audited and unaudited consolidated financial statements and the related notes appearing elsewhere in this prospectus. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Quarterly Results of Operations  </I></B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


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</FONT></P>

<!-- User-specified TAGGED TABLE -->
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="40pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year 2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal Year 2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal<BR>
Year&nbsp;2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>First<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Second<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Third<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fourth<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>First<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Second<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Third<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fourth<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>First<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Second<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Third<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=29 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>(in thousands, except percentages)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net revenues<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>44,783</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>50,921</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>44,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>51,602</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>48,628</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>52,159</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>44,860</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>53,187</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>58,173</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>61,172</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>56,943</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>11,850</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,458</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,656</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,878</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,128</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,956</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>13,635</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>16,970</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19,740</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,015</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>18,175</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>(Loss) income from operations</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(1,295</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,288</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>332</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,669</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,397</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,137</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,367</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,347</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6,220</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,646</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,933</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net (loss) income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(2,428</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>787</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(674</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,363</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>273</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>747</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>284</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,476</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,389</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,331</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,343</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Year-over-Year (Decrease)/Increase</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net revenues</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (13.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (7.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (0.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>16.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(27.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(16.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(6.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>77.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>39.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Percent of Annual Results</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net revenues</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>24.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>22.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>22.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>27.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>25.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>22.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>28.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>(Loss) income from operations</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(64.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>64.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>16.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>83.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>16.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>25.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>16.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>40.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Net (loss) income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(255.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>82.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>(70.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>143.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>10.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>53.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Operating Data</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Comparable store sales change</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (18.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (13.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1> (5.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Consists
of net sales as well as shipping and handling fees.  </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Our
"Percent for Annual Results" are only available for completed fiscal years. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Seasonality  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Due to the seasonal nature of the retail industry, we have historically experienced and expect to continue to experience some fluctuations in our
revenues and net income. We recognized 36.6% and 63.4% of our positive net income in the second and fourth quarters of fiscal year 2008, respectively (in our first and third quarters, we had negative
net income). In fiscal year 2009, we recognized 26.9% and 53.1% of our net income in the second and fourth quarters, respectively (a year in which net income was positive for all quarters). Revenues
generated during the holiday selling season generally contribute to our relatively higher fourth quarter net income. Revenues generated around Easter and the beginning of Spring generally contribute
to the relatively higher second quarter net income. If for any reason our revenues were below seasonal norms or expectations during these quarters, our annual results of operations could be adversely
affected. The level of our working capital reflects the seasonality of our business. We expect inventory levels, along with an increase in accounts payable and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>50</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dt78401_1_51"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>accrued
expenses, generally to reach their highest levels in anticipation of the increased revenues during these periods. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Liquidity and Capital Resources  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our primary sources of liquidity are cash flows from operations and, historically, borrowings under our senior credit facility. Our primary cash
needs are capital expenditures in connection with opening new stores, remodeling or relocating existing stores, distributing our catalogs, operating our website and the additional working capital
required for running our operations. Cash is also required for investment in our information technology systems, the planned upgrade of these systems and distribution facility enhancements. The most
significant components of our working capital are cash and cash equivalents, merchandise inventories, trade payables and other current liabilities. Our working capital position benefits from the fact
that we generally collect cash from sales to customers the same day or, in the case of credit or debit card transactions, within several days of the related sale, and we typically have up to
60&nbsp;days to pay our merchandise vendors, depending on the applicable vendor terms. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;13, 2010, we amended our authorized capital stock to 150,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of undesignated preferred stock, par value
$0.001 per share. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;14, 2010, we completed an initial public offering of common stock which included 3,333,333 new shares sold by us and 1,666,667 shares sold by our existing shareholders, raising net
proceeds of $40.3&nbsp;million for us, after deducting the underwriting discounts and commissions and other offering expenses. As part of the initial public offering, our convertible Series&nbsp;A
and Series&nbsp;B preferred stock were converted into 11,869,109 shares of our common stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;20, 2010, we repaid all amounts owed under the term loan facilities of our senior credit facility and redeemed our non-convertible, non-voting Series&nbsp;C
preferred stock using proceeds from our initial public offering. There were no amounts outstanding under our revolving credit facility of our senior credit facility at the time of repayment.
Subsequently, the senior credit facility was terminated. We are currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of
2011. There is no guarantee that such a facility will be entered into on commercially reasonable terms or at all. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
November&nbsp;2, 2010, the underwriters in our initial public offering closed the full exercise of their over-allotment option to purchase an additional 750,000 shares of our common
stock from our selling stockholders. We did not receive any proceeds from the sale of shares in the over-allotment by the selling stockholders. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe that our cash position, as well as any net proceeds from this offering will be adequate to finance our working capital needs and planned capital expenditures for at least the next
12&nbsp;months. Although we are currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011, there is no guarantee
that we could enter into such a facility on commercially reasonable terms or at all, and even if we do enter into such a facility, our ability to fund our cash flow needs beyond the next
12&nbsp;months will depend largely on our future operating performance. We assess future operating performance by looking at a number of metrics, primarily our net revenues, comparable store and
non-comparable store sales, direct sales through our catalog and e-commerce channels, gross profit margin, and selling, general and administrative expenses. Our liquidity
position is affected by many metrics beyond our control but is specifically directly affected by these performance metrics. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>51</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=59,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=426997,FOLIO='51',FILE='DISK135:[11ZAK1.11ZAK78401]DT78401A.;21',USER='MSULLIV',CD='27-JAN-2011;10:13' -->
<A NAME="page_dt78401_1_52"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
cash and cash equivalents balance decreased $1.4&nbsp;million to $5.8&nbsp;million as of October&nbsp;2, 2010, from $7.2&nbsp;million as of January&nbsp;2, 2010. Components of this
change in cash for the thirty-nine weeks ended October&nbsp;2, 2010 and October&nbsp;3, 2009 as well as fiscal years 2009, 2008 and 2007 are provided below in more detail. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
summary of operating, investing and financing activities are shown in the following table: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Provided by operating activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,175</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,220</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,018</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,179</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10,823</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Used for investing activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(9,656</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,340</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,794</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,725</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5,494</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Used for financing activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,750</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(6,732</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>(Decrease) increase in cash / cash equivalents</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(3,981</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(1,370</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>3,224</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(3,296</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(1,403</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Operating Activities  </I></B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Operating activities consist of net (loss) income adjusted for non-cash items, including depreciation and amortization, deferred income
taxes and the effect of other working capital requirements, as summarized in following table: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,330</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(952</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,780</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,304</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,063</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Adjustments to reconcile net income (loss) to net cash provided by operating activities:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,469</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,357</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,510</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Non-cash impairment charges</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>36,390</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>936</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>196</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Deferred income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,577</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(275</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,561</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(159</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,197</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Inventory</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,850</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(450</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,714</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,636</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,282</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Merchandise payables</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,925</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,041</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(174</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(828</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,540</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other working capital components</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(552</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,645</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,263</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(20</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>795</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Net cash provided by operating activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>7,175</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>4,220</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>13,018</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>2,179</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>10,823</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Net cash provided by operating activities increased $8.6&nbsp;million to $10.8&nbsp;million during the thirty-nine weeks ended October&nbsp;2,
2010 compared to $2.2&nbsp;million for the thirty-nine weeks ended October&nbsp;3, 2009. This increase was attributable to a $5.8&nbsp;million increase in net income, a
$1.4&nbsp;million favorable change in deferred income taxes, a $722,000 improvement in our requirements for inventory, net of </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>52</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=60,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=228234,FOLIO='52',FILE='DISK135:[11ZAK1.11ZAK78401]DT78401A.;21',USER='MSULLIV',CD='27-JAN-2011;10:13' -->
<A NAME="page_dt78401_1_53"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>merchandise
payables, and an $815,000 decrease in our other working capital requirements. The improvements in our cash requirements for inventory were principally due to successful management of our
inventories as well as more favorable terms with our trade vendors. The improvements in our cash requirements for other working capital components are principally due to favorable tenant allowances
related to store occupancy. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
$8.8&nbsp;million improvement in net cash provided by operating activities in fiscal year 2009 compared to fiscal year 2008 is due to growth in net income of $3.7&nbsp;million and a
$6.0&nbsp;million decrease in our requirements for inventory, net of merchandise payables, offset by a $900,000 increase in our other working capital requirements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
$3.0&nbsp;million reduction in cash generated from operating activities in fiscal year 2008 compared to fiscal year 2007 resulted from growth in net income, offset by non-cash
impairment adjustments, of $2.9&nbsp;million, and offset by an increase of $13.3&nbsp;million in our requirements for inventory, net of merchandise payables and a $7.4&nbsp;million decrease in
our other working capital requirements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Inventory,
net of merchandise payables, increased $4.5&nbsp;million in fiscal year 2008 compared to a decrease of $8.8&nbsp;million in fiscal year 2007. This increase was related to comparable
store sales declines in the fourth quarter of fiscal year 2007, which continued through the third quarter of fiscal year 2008, as we continued to adjust from a change in merchandising strategy
implemented during fiscal year 2007. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Investing Activities  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Investing activities consist of capital expenditures for new and existing stores, as well as our investment in information technology: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Capital expenditures (excluding tenant allowances)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(7,381</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,463</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,044</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,559</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,153</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Tenant allowances</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,275</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,177</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,765</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,166</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,341</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Proceeds from sale of assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Net cash used in investing activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(9,656</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(2,340</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(4,794</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(2,725</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(5,494</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>For the thirty-nine weeks ended October&nbsp;2, 2010, capital expenditures, excluding tenant allowances, increased $1.6&nbsp;million compared to
the thirty-nine weeks ended October&nbsp;3, 2009, which increase was attributable to capital expenditures for our new point-of-sale software system, an upgrade to
our systems that support our direct business, new store construction and maintenance of existing stores. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Capital
expenditures, excluding tenant allowances, for the opening of new stores and the relocation of and maintenance on existing stores, were $3.0&nbsp;million, $1.3&nbsp;million and
$1.8&nbsp;million in fiscal years 2007, 2008 and 2009, respectively. The remaining capital expenditures in each period were primarily for our investment in information technology systems and
distribution and corporate facility enhancements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>53</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=61,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=768183,FOLIO='53',FILE='DISK135:[11ZAK1.11ZAK78401]DT78401A.;21',USER='MSULLIV',CD='27-JAN-2011;10:13' -->
<A NAME="page_dt78401_1_54"> </A>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
fiscal year 2007, we invested approximately $1.8&nbsp;million to replace our point-of-sale equipment in all of our stores, along with a $1.5&nbsp;million investment for
our direct business to enhance our e-commerce systems. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
anticipate that capital expenditures, excluding tenant allowances, in fiscal year 2010, will be approximately $3.9&nbsp;million, including $1.3&nbsp;million for 27 new stores, $900,000 for the
relocation of and maintenance of existing stores, $100,000 for maintenance of corporate facilities, and $1.6&nbsp;million for investments in information technology systems, which includes the
implementation of a new point-of-sale software system for our stores and an upgrade to our systems that support our direct business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Financing Activities  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Financing activities have consisted principally of borrowings and payments on our outstanding senior credit facility: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Thirty-Nine Weeks<BR>
Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October 3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October 2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(unaudited)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Payments on long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,750</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(6,732</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Proceeds from issuance of preferred stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Net cash used for financing activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(1,500</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(3,250</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(5,000</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(2,750</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(6,732</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>)</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The $6.7&nbsp;million and $2.8&nbsp;million use of net cash in the thirty-nine weeks ended October&nbsp;2, 2010 and October&nbsp;3, 2009,
respectively, resulted from the scheduled quarterly principal repayments due under our senior credit facility. In addition, we paid an additional $3.0&nbsp;million on our senior credit facility in
the thirty-nine weeks ended October&nbsp;2, 2010, based on our operating results for fiscal year 2009. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
fiscal years 2009 and 2008, $5.0&nbsp;million and $3.3&nbsp;million of net cash, respectively, were utilized for scheduled principal repayments due under our senior credit facility. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
fiscal year 2007, $3.0&nbsp;million in proceeds was generated from the issuance of 30,000 shares of our non-convertible, non-voting Series&nbsp;C preferred stock and
$4.5&nbsp;million was utilized for scheduled principal payments under our senior credit facility, resulting in the $1.5&nbsp;million use of net cash. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Senior Credit Facility  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Effective October&nbsp;1, 2006, we established a six-year, $66.5&nbsp;million senior credit facility with certain lenders managed by
Dymas Funding Company,&nbsp;LLC. As described below, on October&nbsp;20, 2010, we repaid and terminated this credit facility. This senior credit facility provided for a $24.0&nbsp;million term
loan B facility, with quarterly interest payments and a maturity date of October&nbsp;1, 2013, a $27.5&nbsp;million term loan A facility, with quarterly principal and interest payments and a
maturity date of October&nbsp;1, 2012 and a revolving credit facility that provided for advances up to $15.0&nbsp;million, subject to certain limitations, and a maturity date of October&nbsp;1,
2012. There were no amounts outstanding under the revolving credit facility on October&nbsp;2, 2010, January&nbsp;2, 2010, January&nbsp;3, 2009 and December&nbsp;29, 2007. There was
$1.0&nbsp;million outstanding under the revolving credit facility on </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>54</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=62,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=232227,FOLIO='54',FILE='DISK135:[11ZAK1.11ZAK78401]DT78401A.;21',USER='MSULLIV',CD='27-JAN-2011;10:13' -->
<A NAME="page_dt78401_1_55"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>October&nbsp;3,
2009. Both of the term loans and the revolving credit facility were collateralized by substantially all of our assets and a pledge of stock in our subsidiaries. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Interest
rates on our senior credit facility ranged from LIBOR plus 5.25% to LIBOR plus 5.75%, with a floor for LIBOR of 3.25%. Our borrowing capacity was limited to 70% of our total merchandise
inventory pursuant to the terms of our senior credit facility. Pursuant to Amendment No.&nbsp;3 to our
senior credit facility, dated January&nbsp;25, 2008, our borrowing capacity was limited to a maximum of $11.0&nbsp;million. This expired on December&nbsp;31, 2009 and we reverted back to a
borrowing capacity limited to 70% of our total merchandise inventory. The terms of the loan agreements contained certain restrictive covenants, which required, among other things, the maintenance of a
maximum ratio of debt to earnings before interest, taxes, depreciation and amortization, or EBITDA, a minimum fixed charge coverage ratio and maximum capital expenditures. As of October&nbsp;2,
2010, we were in compliance with all financial covenants contained in the senior credit facility. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;20, 2010, we repaid all amounts owing under our term loan facilities of our senior credit facility using proceeds from our initial public offering. There were no amounts outstanding
under our revolving credit facility of our senior credit facility at the time of repayment. Subsequently, the senior credit facility was terminated. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
are in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011. There is no guarantee that such a facility will be entered
into on commercially reasonable terms or at all. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Off Balance Sheet Arrangements  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are not a party to any off balance sheet arrangements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Contractual Obligations  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We enter into long-term contractual obligations and commitments in the normal course of business, primarily debt obligations and
non-cancelable operating leases. The following table summarizes our contractual obligations as of January&nbsp;2, 2010 over the periods specified. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="63pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Payments Due by Period </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Less than<BR>
1&nbsp;year </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>1&nbsp;-&nbsp;3&nbsp;years </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>3&nbsp;-&nbsp;5&nbsp;years </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>More than<BR>
5&nbsp;years </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Long-term debt obligations<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>38,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Operating lease obligations<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>63,317</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,802</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>20,782</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,248</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,485</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Merchandise accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9,078</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9,078</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Total</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>110,645</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>28,130</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>32,782</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>34,248</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>15,485</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
our senior credit facility. See "&#151;Senior Credit Facility." On October 20, 2010 all amounts owed under our senior credit
facility were repaid and the facility was subsequently terminated.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Does
not include rent based on sales. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Impact of Inflation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of
inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition have been immaterial. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>55</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Recent Accounting Pronouncements  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In June 2009, authoritative guidance was issued which establishes the Financial Accounting Standards Board, or FASB, and the Accounting Standards
Codification, or ASC, as the source of authoritative accounting principles generally accepted in the U.S., or GAAP, recognized by the FASB to be applied by nongovernmental entities. This guidance,
which was incorporated into </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Generally Accepted Accounting Principles</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, is effective for annual periods ending after September&nbsp;15, 2009. We adopted
the guidance for fiscal year 2009 and changed certain disclosure references. This change did not have any other impact on our consolidated financial statements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
August 2009, the FASB issued Accounting Standards Update (ASU) 2009-05, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Measuring Liabilities at Fair Value</I></FONT><FONT COLOR="#3B5A6F" SIZE=2> (Topic 820). The objective of the new
guidance is to provide clarification for the fair value measurement of liabilities, specifically providing clarification that in circumstances in which a quoted price in an active market for an
identical liability is not available, a reporting entity is required to measure fair value using certain prescribed techniques. Techniques highlighted include using: (1)&nbsp;the quoted price of the
identical liability when traded as an asset; (2)&nbsp;quoted prices for similar liabilities or similar liabilities when traded as assets; or (3)&nbsp;another valuation technique that is consistent
with the principles of fair value measurements. The new guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or
adjustment to other
inputs relating to the existence of a restriction that prevents the transfer of the liability. Finally, the guidance clarifies that Level&nbsp;1 fair value measurements include both a quoted price
in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active market when no adjustment to the quoted price of the asset is
required. The adoption of this guidance did not have an impact on our financial position or results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
January 2010, the FASB issued ASU 2010-06, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Fair Value Measurements and Disclosures </I></FONT><FONT COLOR="#3B5A6F" SIZE=2>(Topic&nbsp;820): </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Improving Disclosures
about Fair Value Measurements</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. The new guidance requires disclosures of transfers in and out of Level&nbsp;1 and 2 fair value measurements, including a description of the
reason for the transfer. The new guidance also calls for disclosures about the activity in Level&nbsp;3 measurements by separately presenting information on purchases, sales, issuances and
settlements on a gross basis rather than a single net number. The guidance also clarifies (1)&nbsp;the level of disaggregation that should be used in completing disclosures about fair value
measurements and (2)&nbsp;the disclosures required in describing the inputs and valuation techniques used for both nonrecurring and recurring fair value measurements. This guidance became effective
for interim and annual reporting periods beginning after December&nbsp;15, 2009, except for the new disclosures regarding the activity in Level&nbsp;3 measurements, which became effective for
fiscal years beginning after December&nbsp;15, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
do not expect the adoption of these pronouncements to have a material impact on our financial position or results of operations. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Critical Accounting Policies  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This Management's Discussion and Analysis of Financial Condition and Results of Operations has been derived from our consolidated financial
statements that were prepared in accordance with GAAP. GAAP requires management to make estimates and assumptions that affect the reported amounts of our assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, our management evaluates
its estimates and judgments, including those related to inventory valuation, property and equipment, recoverability of long-lived assets, including intangible assets, income taxes and
stock-based compensation. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>56</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
management bases its estimates and judgments on its historical experience and other relevant factors and assumptions it believes to be reasonable to form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources and evaluates these estimates on an ongoing basis. While we believe that the historical experience and other
factors considered provide a meaningful basis for the accounting policies applied in the preparation of the consolidated financial statements, we cannot guarantee that our estimates and assumptions
will be accurate. Actual results could differ from these estimates under different assumptions or conditions which would require us to make adjustments to these estimates in future periods. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
management has reviewed critical accounting policies and estimates with our audit committee. The following reflect the most critical accounting policies and significant estimates and judgments
used in the preparation of our consolidated financial statements. For a complete discussion of our significant accounting policies, refer to Note&nbsp;1 of our consolidated financial statements
"Nature of Business and Summary of Significant Accounting Policies" appearing elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Revenue Recognition  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We recognize revenue at the point-of-sale or upon shipment to customers. Shipping and handling fees billed to customers for
direct sales are included in net revenues. Based on historical sales returns, an allowance for sales returns is recorded as a reduction of net revenues in the periods in which the sales are
recognized. Sales tax collected from customers is excluded from net revenues and is included as part of accrued expenses and other current liabilities on our consolidated balance sheets appearing
elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
sell gift certificates in our stores, which do not expire or lose value over periods of inactivity. We account for gift certificates by recognizing a liability at the time a gift certificate is
sold. We recognize revenue from gift certificates when they are redeemed by the customer. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Inventory Valuation  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Inventories are comprised primarily of women's apparel and accessories and are stated at the lower of cost or market, on a first-in, first-out basis,
using the retail inventory method. We record merchandise receipts at the time they are delivered to our consolidator as this is the point at which title and risk of loss transfer to us. We do not
directly import any merchandise at this time. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
review our inventory levels to identify slow-moving merchandise and generally use markdowns to clear this merchandise. We record a markdown reserve based on estimated future
markdowns related to current inventory to clear slow-moving inventory. During each accounting period, we evaluate the selling trends experienced and the related promotional events or
pricing strategies in place to sell through the current inventory levels. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer
preference, lack of consumer acceptance of fashion items, competition or if it is determined that the inventory in stock will not sell at its currently ticketed price. These markdowns may have an
adverse impact on earnings, depending on the extent and amount of inventory affected. The markdown reserve is recorded as an increase to cost of goods sold in the consolidated statements of operations
appearing elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
perform physical inventory counts at all stores semi-annually. Included in the carrying value of merchandise inventories is a reserve for shrinkage. Shrinkage is estimated based on
historical physical inventory results as a percentage of sales. The estimate for shrinkage reserve can be affected by changes in merchandise mix and changes in actual shrinkage trends. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>57</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Property and Equipment, Net  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is computed for financial reporting
purposes on the straight-line method using service lives ranging principally from three to fifteen years. Furniture and fixtures are typically depreciated over three to five years.
Amortization of leasehold improvements is provided on the straight-line method over the length of the lease or over the estimated useful life of the improvement, whichever is shorter. The
cost of assets sold or retired and the related accumulated depreciation or amortization is removed from the accounts with any resulting gain or loss included in net income. Major renewals and
betterments which extend service lives are capitalized, while expenditures for repairs and maintenance that do not significantly extend the life of the asset are expensed as incurred. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Impairment of Long-Lived Assets  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are exposed to potential impairment if the book value of our assets exceeds their expected future cash flows. The major components of our
long-lived assets are store fixtures, equipment and leasehold improvements. We follow FASB ASC 360, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Property, Plant
and Equipment</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, which requires impairment losses to be recorded on long-lived assets used in operations whenever events or changes in circumstances indicate that the
net carrying amounts may not be recoverable. Our evaluation is performed based on estimated undiscounted future cash flows from operating activities compared with the carrying value of related assets
for the individual stores. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized as the difference between the carrying value and the estimated fair
value of the assets based on the discounted future cash flows of the assets using a rate that approximates our weighted average cost of capital. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Goodwill  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Goodwill of $55.5&nbsp;million was recognized on the acquisition of Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. on
October&nbsp;1, 2006. We follow FASB ASC&nbsp;350, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Intangibles&#151;Goodwill and Other</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, which requires that goodwill and indefinite life
intangibles are subject to an assessment of impairment at least annually. Under this guidance, we are required to compare the fair value of each reporting unit with its carrying amount to determine if
there is a potential impairment of goodwill. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill
within the reporting unit is less than its carrying value. We performed our annual impairment analysis as of January&nbsp;2, 2010 using the discounted cash flow and guideline public company methods
to determine the fair value of the reporting units. Our analysis indicated that no impairment of goodwill occurred or was at-risk as of January&nbsp;2, 2010 and January&nbsp;3, 2009, respectively.
In fiscal year 2007, we recorded a $34.0&nbsp;million impairment of goodwill related to our store operations as a result of the slowing economy, repositioning of our merchandise strategy,
competition with retailers and operating performance of our stores. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Income Taxes  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Income taxes are accounted for pursuant to FASB ASC&nbsp;740, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Income Taxes,</I></FONT><FONT COLOR="#3B5A6F" SIZE=2> which requires that we
recognize deferred tax assets, which include net operating loss carry forwards and tax credits. Deferred income taxes are determined based on the difference between the financial reporting and tax
bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are offset by deferred tax liabilities relating to
nondeductible temporary differences. Recognition of deferred tax assets is based on management's belief that it is more likely than not that the tax benefit associated with temporary differences will
be utilized. The FASB issued guidance requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets will
not be realized. We have determined that valuation allowances against the deferred tax assets are not currently necessary. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>58</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
follow FASB ASC&nbsp;740, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Income Taxes,</I></FONT><FONT COLOR="#3B5A6F" SIZE=2> guidance on accounting for uncertainty in income taxes. The standard prescribes a recognition threshold and
measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in tax returns. In addition, the standard provides guidance on the
de-recognition, classification and disclosure of tax positions, as well as the accounting for related interest and penalties. In May 2007, the FASB amended the guidance associated with the
criteria that must be evaluated in determining if a tax position has been effectively settled and should be recognized as a tax benefit. We did not have any uncertain tax provisions recorded in our
consolidated financial statements appearing elsewhere in this prospectus. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Stock-Based Compensation  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Stock-based compensation expense related to stock options was $28,000, $114,000 and $168,000 for fiscal years 2007, 2008 and 2009, respectively. We
granted options to purchase an aggregate of 368,873, 209,587 and 586,843 shares of common stock in fiscal years 2007, 2008 and 2009, respectively. In fiscal year 2010, effective with our initial
public offering, we granted options to certain of our employees and non-employee directors to purchase an aggregate of 130,000&nbsp;shares of common stock with an exercise price equal to the initial
public offering price of $13.00 per share. These grants and any future stock option grants increased our stock-based compensation expense in fiscal year 2010 and in future fiscal years compared to
fiscal year 2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
account for stock-based compensation in accordance with FASB ASC&nbsp;718, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Compensation-Stock Compensation</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, which establishes accounting for equity
instruments exchanged for employee services. Under the provisions of this statement, stock-based compensation cost is measured at the grant date fair value and is recognized as an expense on a
straight-line basis over the employee's requisite service period (generally the vesting period of the equity grant). As required under this guidance, we estimate forfeitures for options
granted which are not expected to vest. Changes in these inputs and assumptions can materially affect the measurement of the estimated fair value of our stock-based compensation expense. We estimate
the grant date fair value of stock option awards using the Black-Scholes option pricing model. For fiscal years 2008, 2009 and 2010, the fair value of stock options was estimated at the grant date
using the following weighted-average assumptions: </FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;1,<BR>
2011 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Risk-free interest rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.8%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3.1%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.5%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Expected dividend yield</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Expected volatility</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>66.1%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>71.0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>73.7%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted average expected term</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6.25&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6.25&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6.19&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The risk-free interest rate was determined based on the rate of Treasury instruments whose maturities are similar to those of the expected term of
the award being valued. The expected dividend yield was based on our expectations of not paying dividends on our common stock for the foreseeable future. The expected volatility incorporates
historical volatility of similar entities whose shares prices are publicly available. The weighted average expected term is based on the simplified method of estimating the option life. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
of January&nbsp;21, 2011, we had outstanding vested options to purchase approximately 495,146 shares of common stock, at a weighted average exercise price of $3.08 per share, and outstanding
unvested options to purchase 598,948 shares of common stock, at a weighted average exercise price of $5.58 per share. The per share value of each share of common stock underlying the vested and
unvested options at the dates of the grant of the options range from $0.98 to $13.00 per share. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>59</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
fair values of the shares at the dates of grant were originally estimated by a valuation firm that used three approaches to measure fair value: the income approach; the market approach; and the
cost approach. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
income approach focuses on the income-producing capability of a business or asset, by incorporating the calculation of the present value of future economic benefits such as cash earnings, cost
savings, tax deductions and proceeds from disposition. Indications are developed by discounting expected cash flows to the present value at a rate of return that incorporates the risk-free
rate for the use of funds, the expected rate of inflation and risks associated with the particular investment. The discount rate selected is generally based on rates of return available from
investments of similar type and quality. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
market approach measures value through an analysis of recent sales or offerings of comparable assets between arm's length parties. In the valuation of equity interests in business, the market
approach can be applied by utilizing one or both of the following methods: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The guideline public company method focuses on comparing the subject entity to guideline publicly traded entities. In
applying this method, valuation multiples are: (i)&nbsp;derived from historical operating data of selected guideline entities; (ii)&nbsp;evaluated and/or adjusted based on the strengths and
weaknesses of the subject entity relative to the selected guideline entities; and (iii)&nbsp;applied to the appropriate operating data of the subject entity to arrive at a value indication. </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The similar transactions method utilizes valuation multiples based on actual transactions that have occurred in the
subject entity's industry or related industries to arrive at an indication of value. These derived multiples are then adjusted and applied to the appropriate operating data of the subject entity to
arrive at an indication of value.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The cost approach measures the value of an asset as the cost to reconstruct or replace it with another of like utility.
When applied to the valuation of equity interests in businesses, each item on the business' balance sheet is restated to its fair value. By deducting the fair value of the business' liabilities from
the fair value of its assets, the fair value of the equity is isolated. The approach is generally not used to value businesses operated as going concerns. The cost approach is often utilized in the
valuation of tangible assets. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
disclosed more fully in Note&nbsp;10 to our consolidated financial statements, included elsewhere in this prospectus, we granted stock options during fiscal year 2009 with a fair value of $1.27
per share. Factors that contributed to the difference between the fair value of those grants and our initial public offering price of $13.00 are: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the increased private company valuation that occurred subsequent to the date of the grants but previous to the initial
public offering based on earnings and cash flows;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the span of time between grant dates and the estimated time of the initial public offering;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the fact that private company valuations are normally based on historical performance while a public company's valuation
is based in large part on future expected earnings;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the uncertainty of our future cash flow and earnings at the date of the grants;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increased same store sales when compared with the same periods from previous years; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>60</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increased average sales per store;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the continued growth in our store base; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>our expanded geographic footprint. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Quantitative and Qualitative Disclosures about Market Risk  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our principal market risk relates to interest rate sensitivity, which is the risk that future changes in interest rates will reduce our net income or
net assets. Our senior credit facility's interest rates ranged from LIBOR plus 5.25% to LIBOR plus 5.75% with interest paid quarterly with a floor for LIBOR of 3.25%. At October&nbsp;2, 2010, the
weighted average interest rate on our borrowings was 8.4%. Based on a sensitivity analysis at October&nbsp;2, 2010, assuming average outstanding borrowings during fiscal year 2009 of
$40.7&nbsp;million, a 100 basis point increase in interest rates would increase our annual interest expense by approximately $407,000. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;20, 2010, we repaid all amounts owing under our term loan facilities of our senior credit facility using proceeds from our initial public offering. Subsequently, the senior credit
facility was terminated. We are currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011. We anticipate the interest
rate for our new revolving credit facility will vary based on LIBOR plus a fixed rate. Consequently, our principal market risk will likely continue to relate to interest rate sensitivity. We expect
that our new revolving
credit facility will have prevailing market rates, however, there is no guarantee that such a facility could be entered into on commercially reasonable terms or at all. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Given
our exposure to variable interest rates, during fiscal year 2006, we entered into an interest rate swap agreement that involved the receipt of variable rate payments based on the
one-month LIBOR rate in exchange for 5.22% fixed rate payments over the life of the swap agreement without an exchange of the underlying notional amount of $25.0&nbsp;million. The
differential to be paid or received is accrued and recognized as an adjustment to interest expense as interest rates change. The interest rate swap was not designated as a cash flow hedge and,
accordingly, it is reflected at fair value on the consolidated balance sheet and the related change in fair value is reflected in interest expense. The agreement terminated on November&nbsp;13,
2008. The net effect of the agreement was approximately $199,000 of expense for fiscal year ended January&nbsp;3, 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>61</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="dw78401_business"> </A>
<A NAME="toc_dw78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  BUSINESS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Company  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Founded in 1972, Body Central is a growing, multi-channel, specialty retailer offering on-trend, quality apparel and accessories at value
prices. We operate specialty apparel stores under the Body Central and Body Shop banners, as well as a direct business comprised of our Body Central catalog and our e-commerce website at </FONT> <FONT COLOR="#3B5A6F"
SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. We target women in their late teens and twenties from diverse cultural backgrounds who seek the latest fashions and a flattering fit. Our
stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under our exclusive Body Central&reg; and Lipstick&reg; labels. We continually
update our merchandise and floor sets with an emphasis on coordinated outfits presented by lifestyle to give our customers a reason to shop our stores frequently. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe our multi-channel strategy supports our brand building efforts and provides us with synergistic growth opportunities across all of our sales channels. As of January&nbsp;1, 2011, we had
209 stores located in fashion retail venues across 23 states in the South, Mid-Atlantic and Midwest. Our average store size is 4,300 square feet. We aim to generate customer traffic by
designing and merchandising our stores to bring the excitement and look of chic specialty stores. By allocating our capital to areas that we believe achieve the largest impact per dollar spent, such
as in-store marketing graphics, store layout, fixtures and merchandise displays, instead of more expensive structural and architectural improvements, we believe we create an exciting look
for our stores while maintaining low build-out costs. We believe our prices compare favorably to other specialty stores and regional department stores. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our History  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We opened our first Body Shop retail store in 1973 in Jacksonville, Florida, where our corporate headquarters is located. Our current business is
focused on opening Body Central stores and developing the Body Central and Lipstick brands and on moving away from the use of the Body Shop name for our stores. Under the leadership of our founders,
members of the Rosenbaum family, we grew to approximately 175 stores and established our direct business. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
October 2006, members of the Rosenbaum family sold a controlling interest in Body Central to a group of outside investors led by WestView Capital Partners. In October 2010, we completed our initial
public offering and our common stock was listed on The Nasdaq Global Market under the symbol BODY. In recent years, we have completed numerous initiatives that have strengthened our business and
positioned us for future growth, including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Enhanced Executive Team.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;We hired Allen Weinstein as our
President and Chief Executive Officer in 2009. Mr.&nbsp;Weinstein has brought more than 30&nbsp;years of retail experience and has introduced a number of changes to improve our business, including
a focus on our competitive advantages and operational discipline. In addition, Beth Angelo returned as Chief Merchandising Officer in January 2008. Ms.&nbsp;Angelo has reestablished the
merchandising strategy that was core to our historical success and has enhanced the depth of our marketing and merchandising teams. During 2007, Richard Walters joined as our Chief Financial Officer.
Mr.&nbsp;Walters has brought more than 20&nbsp;years of retail experience and has enhanced our financial reporting capabilities and implemented other operating improvements. </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Flexible Test-and-Reorder Business
Model.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Our merchandising model allows us to identify and respond quickly to fashion trends and to bring proven styles to our stores. In
early </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>62</FONT></P>

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<UL>
<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2008,
we returned to our proven test-and-reorder strategy, which combined with short lead times enables us to react quickly to the latest fashion trends. Our extensive vendor
base provides us with access to a large number of designers and enables us to have the best selling products in our stores in a timely fashion. From this vast supply of new designs we can select
merchandise to test, which we believe has the distinctive Body Central look, feel and fit. This model allows us to maximize full-price sales and reduce our inventory risk. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Refined Real Estate Model.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;In 2008, we enhanced our real
estate model by introducing additional structure and analysis to our site selection process. Our real estate committee has instituted a rigorous process for determining new store locations based on
projected sales potential, investment returns and key performance indicators of competitors combined with site visits. We adhere to our selection methodology and do not pursue expansion opportunities
if they do not meet our new store financial and site criteria. Our flexible model has proven successful in hot, warm and cold climates, in small, medium and metropolitan markets and in many different
fashion venues. Since 2008, our average new store performance outpaced the targeted returns in our store economic model. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Recent Accomplishments  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Through initiatives implemented by our executive team since 2008, we have delivered strong results despite the difficult economic environment. For
instance, we have: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>maintained positive comparable stores sales growth over the past nine quarters, through the fourth quarter of 2010,
including an increase of 4.9% for fiscal year 2009 and 14.8% for the thirty-nine weeks ended October&nbsp;2, 2010;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>opened six stores in fiscal year 2008, 15 stores in fiscal year 2009 and 27 stores in fiscal year 2010 and from fiscal
2008 through January&nbsp;1, 2011, we also closed 27 stores, most of which were underperforming, for a net increase of 21 stores;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increased inventory turnover resulting in a meaningful reduction in markdowns and an improvement in gross margin by
approximately 190 basis points between fiscal year 2008 and fiscal year 2009;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>improved operating margin by approximately 300 basis points between fiscal year 2008 and fiscal year 2009, primarily as a
result of reduced labor and occupancy costs, resulting in an increase in income from operations to $8.2 million for fiscal year 2009 from $2.0 million for fiscal year 2008; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>increased net income by $3.7&nbsp;million to $2.8&nbsp;million for fiscal year 2009 from a loss of $952,000 in fiscal
year 2008, and by $5.8 million to $7.1 million for the thirty-nine weeks ended October&nbsp;2, 2010 from $1.3&nbsp;million in the thirty-nine weeks ended October&nbsp;3, 2009. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Market  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Based on publicly available data from the NPD Group,&nbsp;Inc., a leading global provider of apparel market research information for tracking
consumer behavior, sales in the U.S. women's apparel market totaled approximately $104.0&nbsp;billion for the 12&nbsp;months ended December 2009. While our products appeal to women of varying ages
and diverse backgrounds, our core customer is a young woman in her late teens or twenties who enjoys shopping for the latest fashions. According to the U.S. Census Bureau, there were estimated to be
approximately 25.0&nbsp;million women as of July 2009 between the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>63</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>ages
of 18 to 29. Our target customer represents a growing segment of the U.S. population and we believe that she spends a higher proportion of her income on fashion than the general population. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Our Strengths  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We believe that the following strengths are critical to our continued success: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Established and Differentiated Brand.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;With over
35&nbsp;years of operating experience, we have built the Body Central brand around our strategy of providing the right fashion and quality, with a flattering fit at a value price. We believe our
core customer is passionate about finding current fashions typically offered in higher-end specialty stores and boutiques at value prices in an exciting store environment. We also believe
that the look and feel of our stores, in-store graphics, fashion assortment, product labeling and overall shopping experience are critical to building our brand image. All of these factors
create a unique Body Central experience.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Exciting Fashion Delivered at Compelling Value.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;We deliver
a carefully edited selection of quality, fashionable apparel and accessories for most occasions at value prices. Our broad product assortment of apparel, jewelry, accessories and footwear allows our
customers to purchase complete outfits. We do not dictate fashion trends, but respond quickly to offer best selling styles. We maintain a fresh and exciting shopping experience by continually
refreshing our inventory through almost daily shipments to our stores. We design our windows, displays and floor sets to emphasize outfit ideas and refresh them every two to three weeks to drive
repeat store visits.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Multiple Sales Channel Synergies.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;We complement our retail
stores with a successful direct business, which consists of both catalog and internet sales, which we have operated since 2005. We believe our catalog differentiates us from most competitors. We
select our best selling products from our stores to sell through our direct channel. We believe our multi-channel strategy builds brand awareness and drives sales across all of our channels. We
operate retail stores in 23 states and have direct sales in all 50&nbsp;states. In fiscal year 2009, our two highest volume states for direct sales were outside of our retail store geography. For
the fiscal year 2009, direct sales represented approximately 16.8% of our net revenues.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Powerful New Store Economics.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;We have a proven store model
that works across a variety of market sizes, demographics, climates, real estate venues, store sizes and mall classifications. Our flexible store format allows us to adapt to available locations and
store footprints quickly with a low investment cost that has delivered attractive returns and short payback periods. The majority of our stores range from approximately 3,200 to 5,200 square feet with
an average size of 4,300 square feet. Our average net investment for a new store, including inventory, is approximately $100,000. On average, our new stores are paying back our investment in less than
one year based on net operating cash flows for that store and inclusive of lease commitments. We believe our attractive new store economics, flexible real estate model and disciplined new store
development process allow us to opportunistically expand our store footprint on a profitable basis.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Disciplined Inventory Management.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;We test the vast
majority of all new products on a limited basis prior to a broader roll out of the best selling items. This proven test-and-reorder strategy serves as the foundation of our
merchandising philosophy and instills discipline in our inventory management. Our ability to interpret the amount of </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>64</FONT></P>

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<UL>
<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>merchandise
we will be able to sell to our customers by color, classification and size, combined with our vendors' short production lead time, allows us to respond rapidly to changing trends while
reducing markdowns and inventory risk.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Proven Management Team.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Allen Weinstein, our President
and Chief Executive Officer, Beth Angelo, our Chief Merchandising Officer and President of Direct Sales, and Richard Walters, our Chief Financial Officer, have an average of more than 25&nbsp;years
of retail experience, including in design, marketing, sourcing, merchandising and real estate, and have been instrumental in our strong performance in recent years. In addition, experience and tenure
run deep within the Body Central organization. Our regional and district managers average over 20&nbsp;years and 10&nbsp;years of experience, respectively. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Growth Strategy  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We believe we are well positioned to take advantage of opportunities to increase revenues, capture market share and drive net income growth,
including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Expand Our Store Base.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;We believe our concept has broad
appeal and significant expansion opportunity. With only 209 stores in 23&nbsp;states as of January&nbsp;1, 2011, we have considerable opportunity to expand in existing and adjacent markets. We
opened 15 stores in fiscal year 2009 and 27&nbsp;new stores in fiscal year 2010. We expect to open approximately 30 to 35&nbsp;new stores in fiscal year 2011. We have also closed 13 stores, most
of which were underperforming, during fiscal years 2009 and 2010 to enhance our overall store performance. We believe we can continue to open new stores at an annual rate of 15% for the next several
years.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Increase Comparable Store Sales and Enhance Brand
Awareness.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;We plan to grow our comparable store sales by merchandising our stores with the latest fashion trends and maintaining a sharp
focus on store level execution through implementing a district manager training program, building a grading system for stores, sending more floor sets to stores and almost daily communication with
stores. We believe our ability to test products quickly and to rapidly replenish the best selling items keeps our shopping experience exciting and drives repeat customer visits and purchases. We
believe we will be able to enhance our brand awareness through our continued marketing efforts and in-store experience. In addition, we believe our extensive catalog distribution helps
build our Body Central brand. For example, in fiscal year 2009, we distributed 10&nbsp;catalog editions and approximately 20.5&nbsp;million catalogs totaling approximately 1.4&nbsp;billion pages
to our customers. Since January&nbsp;2, 2005, we have distributed 56 catalog editions to our customers.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Expand Operating Margin.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;As we grow, we believe we can
improve our operating margin. We expect to leverage our infrastructure and buying power and streamline processes through the implementation of our new point-of-sale system and
catalog and warehouse management systems. In addition, we will continue to refine our inventory disciplines and upgrade information technology to enhance our productivity. We also believe we can
enhance our operating margins through further improvements in our store operations and labor productivity. Finally, we expect to see continued improvements in our new store economics through our
disciplined real estate model.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Grow Our Direct Business.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;In July 2010, we implemented a
new software system for our direct business. This new system is expected to enhance the potential for growth in our </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>65</FONT></P>

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<UL>
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>direct
business, by allowing us to process more orders, offer a more dynamic merchandise presentation on our website and enhance our marketing efforts by including, among other things, the ability to
target specific customer groups. In addition, we recently implemented a new
point-of-sale software system which is expected to increase the synergies between our direct business and our retail stores. </FONT></P>

</UL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Products  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We offer a broad selection of apparel and accessories targeted to young women who seek the latest fashion styles at value prices. The majority of our
products are sold under our exclusive Body Central&reg; and Lipstick&reg; labels. We also sell a select assortment of branded merchandise, primarily denim, to complement our exclusive
label merchandise. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
products are presented to emphasize coordinated outfits. Our assortment of tops, dresses, bottoms, jewelry, accessories and shoes fits the many lifestyles of our customers&nbsp;&#151;
casual, club, dressy and active. The majority of our products are priced under $20 and we believe represent real values. We strategically price some of our best selling tops and our jewelry to drive
customer traffic. The table below indicates our product mix as a percentage of net sales in our stores derived from our two major product categories, as of the fiscal year end for each of the years
indicated below: </FONT></P>
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<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Apparel</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>73.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>75.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>76.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accessories</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>26.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>24.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>23.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Total</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>100.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>100.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>100.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Typically, our direct business features an edited selection of our best selling store merchandise targeted to a slightly broader customer base. We monitor
trends in our stores in order to optimize our direct merchandise offerings. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Merchandising  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our merchandising team seeks to identify current fashion trends and merchandise consistent with our brand image. We do not dictate fashion trends;
rather we focus on quickly adapting to the latest trends to provide the right merchandise at value prices every day. Our merchandising team consists of our Chief Merchandising Officer, buyers and
assistant buyers organized by product category, as well as a team focused on our direct business. Our merchandising team is responsible for selecting and sourcing our product assortments, managing
inventory levels, and allocating merchandise to stores. We build our product assortments after careful review and consideration and select products that can be displayed in our stores in a coordinated
manner to encourage our customers to purchase complete outfits. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
merchandising team holds weekly meetings to review merchandise performance and to determine new fashion trends. We have access to the design expertise of numerous designers through our broad
vendor base who provide us with hundreds of new styles each week to review. The merchandising team selects new style items from the styles presented to us and makes necessary changes based on current
fashion trends and preferences of our customer. Before placing an order, every item is evaluated for style, quality and fit to ensure standards consistent with our Body Central brand. Our vendor
relationships provide us the ability to introduce these fashion-right products to our stores quickly. Once in the stores, our buyers use an array of retail intelligence tools to track the performance
of each item and class, and then place appropriate reorders for popular merchandise. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>66</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Sourcing  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our test-and-reorder strategy enables us to respond rapidly to changing trends. This strategy allows us to minimize our
inventory risk by testing small quantities in our stores before placing larger purchase orders for a broader roll out. Thousands of items are tested throughout the year, but most of our sales are
generated from items that are reordered after successful testing. Our ability to make decisions quickly on successful items and our vendors' short production lead time increase our speed to market.
Therefore, our test-and-reorder strategy enables us to react quickly to evolving trends and fashion preferences, which minimizes fashion risk and inventory markdowns. We
believe this flexible sourcing model enables us to maintain a smaller percentage of our inventory on clearance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
do not own or operate any manufacturing facilities and buy our merchandise from third-party vendors on an order-by-order basis. We have relationships with approximately 240 U.S. vendors. Our top 10
vendors sourced approximately 45% of our merchandise in 2009, with our two largest vendors each representing approximately 11%. We continue to expand our vendor network, which gives us access to a
broad variety of merchandise from a multitude of designers and vendors at competitive prices. We believe our vendors view us as an important retail partner given our scale and market position. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe our sourcing strategy has been successful because we have a balance of domestic and import production by which our U.S. vendors supply merchandise to us from both U.S. manufacturers and
foreign manufacturers that are located in such countries as China. This strategy provides us with lead times as short as four to six weeks for domestic purchases and eight to twelve weeks for imports. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Every
vendor that supplies our merchandise is required to adhere to our vendor manual, which is designed to ensure that our vendor's business is conducted in a legal, ethical and responsible manner.
Our vendor manual requires that each of our suppliers operates in compliance with applicable wage, benefit, working hours and other local laws, and forbids the use of practices such as child labor or
forced labor. See "Risk Factors&#151;Risks Related to Our Business&#151;We may suffer risks if our vendors fail to comply with applicable laws, including a failure to use acceptable
labor practices or if our vendors suffer disruptions in their businesses" for more information. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Sales Channels  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We conduct our business through two primary sales channels: retail stores and direct, which consists of the Body Central catalog and our website, </FONT> <FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT
COLOR="#3B5A6F" SIZE=2>. We do not incorporate the information contained on, or accessible through, our website into this prospectus, and you should not consider
it part of this prospectus. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Stores  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>For fiscal year 2009, our stores generated net sales of $165.3&nbsp;million, which represented 83.2% of our total net revenues. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
of January 1, 2011, we had 209 retail stores under the names Body Central and Body Shop in 23 states, located primarily in the South, Mid-Atlantic and Midwest. The majority of our
stores range in size from 3,200 to 5,200 square feet, with an average of approximately 4,300 square feet. The stores we opened during fiscal year 2009 achieved annualized sales per store and sales per
gross square foot in excess of our average store sales. Our stores have historically been located in regional malls and lifestyle centers in small, medium and metropolitan markets. The nature of our
fashion merchandise enables us to be successful in markets across hot, warm and cold climates. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>67</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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NAME="page_dx78401_1_68"> </A>


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</FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following store list shows the number of stores we operated in each state as of January&nbsp;1, 2011: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="33%" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="33%" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:22pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>State

<!-- COMMAND=ADD_SCROPPEDRULE,22pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Number of<BR>
Stores </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:22pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>State

<!-- COMMAND=ADD_SCROPPEDRULE,22pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Number of<BR>
Stores </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Alabama</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Maryland</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Arizona</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Mississippi</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Arkansas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Missouri</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Delaware</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>North Carolina</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Florida</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Ohio</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Georgia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Oklahoma</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Illinois</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Pennsylvania</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Indiana</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>South Carolina</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Iowa</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Tennessee</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Kansas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Texas</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>25</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Kentucky</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Virginia</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Louisiana</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B> Total </B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>209</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Store Design and Environment  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our stores are designed to effectively present our merchandise and create an exciting atmosphere to draw customers into our store, similar to fashion
boutiques. The stores feature a vibrant look with colorful displays, popular music and aspirational lifestyle photos. Our stores are constructed to allow us to efficiently shift merchandise displays
for each season and major holiday. Our open floor design enables customers to easily view most of our merchandise. We use a large number of body forms to provide customers with full outfit ideas. Each
store's merchandise presentation, including windows, tables, gondolas and walls, is refreshed every two to three weeks to keep our shopping experience new and exciting. We believe by constantly
changing our products and floor sets with new merchandise, we give our customers a reason to shop our stores frequently. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
maintain a consistent look in our stores, including signature blue LED storefront signs, blue mosaic tiles on the storefront columns and a well-lit selling area. High ceilings and slat
walls allow us to stock and display our merchandise effectively. We seek site locations that have a store front of at least 30&nbsp;feet wide to create an inviting open floor feel, complete with
visually appealing glass line presentations. </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Site Selection and Store Growth  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In selecting a location for a new store, we target malls as well as lifestyle, power and outlet centers in areas with suitable demographics and where
similar fashion retailers have performed well. We have a real estate committee that utilizes a disciplined approach to analyze factors that include mall productivity, mall-specific
competitive environment, average sales of junior retailers and configuration of available space for potential new store locations. We seek prominent locations in high-traffic areas of the
mall and in close proximity to other retailers targeting juniors and young women as we have found that when we have locations in malls with certain key competitors our net sales in those stores
typically exceed the net sales of stores that are not located in proximity to those key competitors. Our flexible store format allows us to utilize both new and second-generation retail locations. We
also evaluate new store locations based on projected sales and ensure that the capital investment and estimated store level contribution satisfies our targeted return threshold. We negotiate leases
with a variety of term lengths, often with an early termination right held by us if certain sales goals are not achieved. This store selection strategy is designed to ensure consistent store
performance by adhering </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>68</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>to
a rigorous selection process that ensures each potential site meets our benchmark level of profitability. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
have currently identified a number of potential sites for new stores with appropriate market characteristics. We opened 15 new stores in fiscal year 2009 and 27&nbsp;stores in fiscal year 2010.
We have also closed 13 stores, most of which were underperforming, from fiscal year 2009 through January&nbsp;1, 2011 to enhance our overall store performance. In addition, our 2011&nbsp;plans
include opening approximately 30 to 35&nbsp;stores with approximately 15% new store growth over the next several years. Our new store model assumes average unit revenue of $850,000 to $1,100,000 in
the first 12 months and an average net initial cash investment of approximately $100,000 which includes $75,000 of average build-out costs, including equipment and fixtures (net of
landlord contributions), and $25,000 of initial inventory (net of payables). Our new store operating model assumes a less than one year pay back on our investment based on net operating cash flows
inclusive of lease commitments. Stores opened using this model have achieved average pre-tax cash return on investment in excess of 100%. Our fiscal year 2009 new stores, on average,
generated unit revenue in excess of $1,000,000 with a cash return in excess of 150% and a payback period of less than seven months. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
have enhanced our existing store base by relocating or closing underperforming stores that we believed were not profitable or located in underperforming markets as well as remodeling our older
stores. From fiscal year 2005 through fiscal year 2010, we relocated 29 stores and we remodeled 12 of our older stores. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
table below highlights certain information regarding our new store openings, store closings, relocations and remodels as of the fiscal year end for each of the years indicated below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="32pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2005 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2006 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stores at beginning of period</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>162</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>163</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>176</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>188</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>180</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>185</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stores opened during period</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>27</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stores closed during period</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(14</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stores at end of period</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>163</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>176</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>188</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>180</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>185</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>209</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Remodeled stores</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Relocated stores</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Direct  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our direct business consists of Body Central catalogs and our </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2> website and enables us to
reach customers by phone, mail or the Internet in all states and further build our Body Central brand. For fiscal year 2009, our direct business generated revenues of $33.5&nbsp;million or
approximately 16.8% of our net revenues. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
currently obtain customer information from both catalog and Internet customers as well as mail and email customer lists that we purchase. We currently have a database containing approximately
1,450,000 mailing addresses and approximately 1,190,000 email addresses. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
have implemented a new system for our direct business, which is expected to enhance our capabilities and support growth. For example, this system will support a more dynamic presentation of
merchandise, allow us to process more orders and enhance our marketing efforts by including, among other things, the ability to target specific customer groups based on their shopping history and
spending habits. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>69</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dx78401_1_70"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Catalog  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Since the majority of our competitors do not offer a catalog, we believe our Body Central catalog differentiates us from them. We believe our catalog
reinforces the Body Central brand image and drives sales across all of our sales channels. For example, following the delivery of our catalogs, we have historically experienced an increase in orders
on our website. In fiscal year 2009, we distributed 10 catalog editions and approximately 20.5&nbsp;million catalogs totaling approximately 1.4&nbsp;billion pages to our customers. Since
January&nbsp;2, 2005, we have distributed 56&nbsp;catalog editions to our customers. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>All
creative work on the Body Central catalog is developed in-house, which we believe allows us to consistently reinforce our brand image. Photography is shot both on location and in
studios, and page layout and copy writing are executed by us. Digital images are transmitted directly to outside printers, thereby reducing lead times and improving reproduction quality. </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Internet  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our customers are able to purchase our merchandise through our website as well as obtain current information on our store locations. Most of our
direct business purchases are made online although often tied to a catalog distribution. As with our catalog, we believe our website reinforces our Body Central brand. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Marketing and Advertising  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our marketing approach aims to increase customer traffic and build our brand image. We believe one of our strongest marketing pieces is our Body
Central catalog. Additionally, we use email communications, in-store graphics, our website and social networking sites, such as Facebook and Twitter to achieve our marketing goals. We
often coordinate marketing efforts with the malls and shopping centers in which our stores are located. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe that the look and feel of our stores, our in-store graphics, product labeling, customer service and overall shopping experience are critical to building our brand image.
Merchandise is presented with a cohesive marketing theme, often around seasons and holidays, which unifies the store presentation and emphasizes both on-trend fashions and fashion basics.
For example, we display large posters throughout each store that feature aspirational photos of our models wearing complete Body Central outfits, as well as a large number of body forms featuring
current merchandise. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Distribution  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We distribute all of our merchandise from our corporate headquarters in Jacksonville, Florida, which occupies approximately 179,000 square feet,
consisting of approximately 146,000 square feet of warehouse space and approximately 33,000 square feet of office space. All of our merchandise is received, inspected, managed, stored and distributed
through our warehouse. Most of our merchandise is currently pre-ticketed and pre-assorted by our vendors, which allows us to distribute the merchandise quickly and reduce labor
costs. Merchandise is shipped almost daily to our stores to ensure a steady flow of new inventory. We believe that the capacity of our distribution center is sufficient to support our expected growth
plans for the foreseeable future. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Information Technology Systems  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our information technology systems provide support and information to our management team. We believe our systems provide us with improved
operational efficiencies, scalability, increased management control and timely reporting that allows us to identify and respond to trends in our </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>70</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>business.
We use a combination of customized and industry-standard software systems to support the following functions: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>store point-of-sale;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>e-commerce and catalog;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>inventory management; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>financial reporting. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
are in the process of investing in and upgrading several of our systems to provide improved support of our current operations and position us for future growth. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
recently replaced our point-of-sale software system. We expect this upgrade to enhance customer service, improve operational efficiency, increase management reporting and
control and increase synergies between our direct business and our retail stores. Our new system complements our core functions of purchasing, merchandising, finance and accounting, inventory and
order management and warehousing and distribution. This new system was deployed across all of our stores in advance of the 2010 holiday shopping season. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>During
July 2010, we upgraded our systems that support our direct business and redesigned our website. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Competition  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The specialty-apparel retail market is highly competitive. We compete primarily with other specialty retailers and Internet and catalog businesses
that specialize in women's apparel and accessories targeting customers in their late teens and twenties. We believe the principal basis upon which we compete is by offering quality, current fashions
at value prices. We believe that our success is dependent on are our in-store experience, our Body Central brand, our current fashions and desirable store locations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
success also depends in substantial part on our ability to respond quickly to fashion trends so that we can meet the changing demands of our customers. We believe our competitors include other
specialty retailers such as Forever 21, Wet Seal, rue21, Charlotte Russe and A&eacute;ropostale. Our market is highly competitive and many of these retailers have substantially greater name
recognition, as well as financial, marketing, and other resources, and devote greater resources to the sale of their products than we do. We may face new competitors and increased competition from
existing competitors as we expand into new markets and increase our presence in existing markets. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Intellectual Property  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We have registered numerous trademarks with the U.S. Patent and Trademark Office, including Body Central&reg; and Lipstick&reg;. In
addition, we own domain names, including </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, and we own unregistered copyright rights in our website content. We believe our material
trademarks have value, and we protect them against infringement. Our Body Central&reg; trademark is registered until September 2013 when it is up for renewal. Our Lipstick&reg;
trademark is registered until January 2019 when it is up for renewal and our Body Shop&reg; trademark is up for renewal in December 2015. We will also continue to file new applications as
appropriate to protect our intellectual property rights. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>71</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_dx78401_1_72"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
some regions of the U.S., our stores are located in the same malls and shopping centers as stores operated by a company doing business under the name The Body Shop&reg;, which is a
cosmetics and beauty store. We are not affiliated with this company. In 1991, we granted this company a license to use our Body Shop trademark which is held by us in connection with retail store
services for the sale of women's apparel and apparel accessories. Under the terms of this license agreement, we granted an exclusive, royalty-free license to the cosmetics and beauty store
company to use our "Body Shop" mark for its business as follows: as a service mark for mail order retail sales of t-shirts and sweatshirts in 49 states and territories and of other apparel
in 38 states and territories; as a service mark for retail store sales of apparel in 38 states and territories; and as a trademark for apparel in 38 states and territories. This license was
non-exclusive as to certain uses and our agreements with this company permit us to continue to use our "Body Shop" mark in our stores located in Alabama, Arkansas, Florida, Georgia,
Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. We currently operate under the Body Central banner and, in a minority of stores in certain states, we operate
under the Body Shop banner. Our current business is focused on developing the Body Central&reg; and Lipstick&reg; brands and we are moving away from the use of the Body Shop name in
our stores. We currently operate 61 stores under the Body Shop banner, and we expect that this number will decline as we remodel or update older stores and transition to Body Central signs and
banners. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Regulation and Legislation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are subject to labor and employment laws, laws governing advertising and promotions, privacy laws, safety regulations, consumer protection
regulations and other laws that regulate retailers and govern the promotion and sale of merchandise and the operation of stores and warehouse facilities. We monitor changes in these laws and believe
that we are in material compliance with applicable laws. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Insurance  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We use a combination of insurance and self-insurance for a number of risk management activities, including workers' compensation, general
liability, automobile liability and employee-related health care benefits, a portion of which is paid by the employees. We evaluate our insurance requirements on an ongoing basis to maintain adequate
levels of coverage. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Properties  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We do not own any real property. All of our properties are leased. Our executive offices, warehouse and distribution center are located in an
approximately 179,000 square foot facility in Jacksonville, Florida. This facility is leased under a lease agreement expiring in 2016. Of the approximately 179,000 square feet in the facility,
approximately 146,000 square feet are dedicated to warehouse space and distribution. We believe that our Jacksonville facility will be able to meet our growth plans for the foreseeable future,
although we may from time to time lease new facilities or vacate existing facilities as our operations require. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
of January&nbsp;1, 2011, we had 209 retail stores in 23 states, located primarily in the South, Mid-Atlantic and Midwest. All of our stores are leased from third parties, and the
leases typically have terms of five to ten years. Some of our leases have early termination clauses, which permit the lease to be terminated by us if certain sales levels are not met in specific
periods or if a shopping center does not meet specified occupancy standards. In addition to future minimum lease payments, most of our store leases provide for additional rental payments based on our
achieving specified net sales and many provide for additional payments associated with common area maintainence, real estate, taxes and insurance. In addition, many of our lease agreements have
defined escalating rent provisions over the initial term and extensions. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>72</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Employees  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As of January&nbsp;10, 2011, we had approximately 2,440 total employees. Out of our total employees, approximately 120 were based at our corporate
headquarters in Jacksonville, Florida, and approximately 2,320 were store employees. We had approximately 730&nbsp;full-time employees and approximately 1,710 part-time
employees, who are primarily store employees. None of our employees are represented by a labor union, and we have had no labor-related work stoppages as of January&nbsp;10, 2011. Our relationship
with our employees is a key to our success, and we believe that relationship is strong. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Seasonality  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our business is seasonal in nature reflecting increased demand during the year-end holiday season, other holidays, such as Easter, the
beginning of Spring and peak shopping periods, such as the back-to-school season. As a result of this seasonality and generally because of variation in consumer spending habits, we experience
fluctuations in net revenues and working capital requirements during the year. See "Management's Discussion and Analysis of Financial Condition and Results of Operations&#151;Quarterly Results
and Seasonality&#151;Seasonality" for more information. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Legal Proceedings  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are subject to various legal proceedings and claims, including employment claims, wage and hour claims, intellectual property claims, contractual
and commercial disputes and other matters that arise in the ordinary course of our business. While the outcome of these and other claims cannot be predicted with certainty, we do not believe that the
outcome of these matters will have a material adverse effect on our business, results of operations or financial condition. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Privacy Policy  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the course of our business, we collect information about our customers, including customer data submitted to us in connection with purchases of
our products at stores as well as from our direct business. We respect the privacy of our customers and take steps to safeguard the confidentiality of the information that they provide to us. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>73</FONT></P>

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<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  MANAGEMENT    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Executive Officers and Directors  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Below is a list of our executive officers and directors and their respective ages and positions as of January&nbsp;10, 2011 and a brief account of
the business experience of each of them. Our board of directors consists of eight members. </FONT></P>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:27pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Name


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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Age </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Position </B></FONT></TH>
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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>B. Allen Weinstein</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>64</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>President, Chief Executive Officer and Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Beth R. Angelo</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>43</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Chief Merchandising Officer, Executive Vice President, President of Direct Sales and Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Richard L. Walters</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>58</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Executive Vice President, Treasurer and Chief Financial Officer</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Martin P. Doolan<SUP>(1)(2)(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>70</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Chairman of the Board of Directors</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Scott M. Gallin<SUP>(1)(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>38</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>John K. Haley<SUP>(1)(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>59</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Jerrold S. Rosenbaum</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>74</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Carlo A. von Schroeter<SUP>(2)(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>47</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>John H. Turner</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>50</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Member
of our audit committee.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Member
of our compensation committee.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Member
of our nominating and governance committee. </FONT></DD></DL>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Executive Officers  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>B. Allen Weinstein</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 64, has been our President and Chief Executive Officer since August 2009. He
joined our board of directors in June 2010. Prior to joining us, Mr.&nbsp;Weinstein served in various senior management positions with The Cato Corporation, a specialty retailer of women's apparel,
from 1997 to 2009, including as Executive Vice President-Chief Merchandising Officer of The Cato Corporation, from 2005, and Executive Vice President, Chief Merchandising Officer of The Cato Division,
from 1997. From 1995 to 1997, Mr.&nbsp;Weinstein was Senior Vice President-Merchandising of Catherines Stores Corporation, a specialty retailer of women's apparel. From 1981 to 1995, he served as
Senior Vice President of Merchandising of Bealls,&nbsp;Inc., a retailer of apparel and home merchandise. Since January 2010, Mr.&nbsp;Weinstein has served on the board of directors and
compensation committee of Destination Maternity Corporation, a Nasdaq-listed retailer of maternity apparel. He received a B.B.A. degree in finance in 1970 from the University of Houston.
Mr.&nbsp;Weinstein brings to our board of directors almost 30&nbsp;years of experience in apparel retailing. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Beth R. Angelo</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 43, has served as our Chief Merchandising Officer and Executive Vice President since 2008. Before the 2006 Transaction she had served
the company in various capacities since 1994 and was Chief Merchandising Officer from 1996 through the 2006 Transaction. Ms.&nbsp;Angelo left the role as Chief Merchandising Officer in
May&nbsp;2007, but returned to that position in January&nbsp;2008. She has also served as our President of Direct Sales since 2005, a position which she continued between May&nbsp;2007 and
January&nbsp;2008 and through present day. She has served as a member of our board of directors since October 2006. Ms.&nbsp;Angelo also served as the sportswear merchant for Venus Swimwear, a
direct business, from 1999 to 2004 as part of a joint venture with Body Central. Ms.&nbsp;Angelo received a B.S. degree in business administration in 1989 from the University of Florida and an
M.B.A. degree in </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>74</FONT></P>

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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1994
from Northwestern University's Kellogg Graduate School of Management. Beth Angelo serves on the Executive Advisory Board for the David&nbsp;F. Miller Center for Retail Education and Research at
the University of Florida. Ms.&nbsp;Angelo brings to our board of directors experience in apparel retailing, including her recent 19&nbsp;years in specialty retailing of women's clothing and
accessories, and valuable expertise in merchandising and marketing. Ms.&nbsp;Angelo is Jerrold&nbsp;Rosenbaum's daughter. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Richard L. Walters</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 58, has served as our Executive Vice President, Treasurer and Chief Financial Officer since January 2007. From 2001 until 2006,
Mr.&nbsp;Walters was the Chief Financial Officer of Hearing Healthcare Management,&nbsp;Inc., a retailer of hearing products and services, in Columbus, Ohio. Prior to that, from 1985 until 2000,
Mr.&nbsp;Walters served as Vice-President of Finance of Value City Department Stores,&nbsp;Inc., a discount department store chain with more than 150 stores. Mr.&nbsp;Walters
received a B.S. degree in accounting in 1975 from the Ohio State University and his CPA license in 1978. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Directors  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following information pertains to the directors (other than Mr.&nbsp;Weinstein and Ms.&nbsp;Angelo who are described under "Executive
Officers"), their ages, principal occupations and other directorships for at least the last five years and information regarding their specific experience, qualifications, attributes or skills. In
selecting directors, we consider factors that are in our best interests and those of our stockholders, including diversity of backgrounds, experience and competencies that our board of directors
desires to have represented. These competencies include: independence; adherence to ethical standards; the ability to exercise business judgment; substantial business or professional experience and
the ability to offer our management meaningful advice and guidance based on that experience; ability to devote sufficient time and effort to his or her duties as a director; and any other criteria
established by our board of directors together with any core competencies or technical expertise necessary for our committees. We believe that each director possesses these qualities and has
demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to us and to our board of directors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Martin P. Doolan</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 70, has served as a member of our board of directors since October 2006 and became Chairman of our board of directors upon the
completion of our initial public offering in October 2010. Mr.&nbsp;Doolan is the founder and currently the Chairman and Chief Executive Officer of Multitech Enterprises,&nbsp;Inc., a firm
specializing in providing management expertise to companies with underperforming earnings. Mr.&nbsp;Doolan previously worked for Value City Department Stores,&nbsp;Inc., an off-price department
store chain, in various capacities, including Vice Chairman and member of the board of directors from July 1998 to January 2002, and as the President and Chief Executive Officer from July 1997 until
July 1999. This included responsibilities as the Chief Executive Officer of DSW Shoe Warehouse,&nbsp;Inc., a subsidiary of Value City Department Stores,&nbsp;Inc. and a retailer of specialty
footwear. Prior to that, Mr.&nbsp;Doolan served as the Chief Executive Officer of Delstar Technologies,&nbsp;Inc., a private company and a manufacturer of thermoplastic nets and laminates for
water, air and oil filtration, from June 1995 until June 1997, the Chief Executive Officer of Bestop,&nbsp;Inc., a manufacturer of automotive parts and accessories, from October 1987 until June 1995
and the Chief Executive Officer of Pilliod Furniture,&nbsp;Inc., a manufacturer of wood household furniture, from 1985 until 1987. Mr.&nbsp;Doolan has served on the board of directors and audit
committee of Lectrus&nbsp;Inc., a private company and manufacturer of electrical systems and metal enclosures, since January 2007, the board of directors, audit and compensation committees of Radiac
Abrasives,&nbsp;Inc., a manufacturer of abrasive products, from February 2007 until June 2009 and as Chairman of the board of directors of Delstar Technologies,&nbsp;Inc. since June 1995. He
previously served on the board of directors of American Eagle Outfitters,&nbsp;Inc., a public company and specialty apparel retailer traded on the New York Stock Exchange, from June 1994 until June
2004. Mr.&nbsp;Doolan received a B.A. degree in Business from Dallas Baptist University and associate degrees in electronics engineering from the RCA Institute and the City </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>75</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>University
of New York. Mr.&nbsp;Doolan brings to our board of directors over 30&nbsp;years of executive business experience, including many in the retail industry. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Scott M. Gallin</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 38, has served as a member of our board of directors since October 2006. Mr.&nbsp;Gallin has been a managing director of PineBridge
Investments, a multi-strategy investment manager, since 2002. Additionally, Mr.&nbsp;Gallin is an adjunct professor of finance and economics at Columbia Business School, where he has taught courses
since 2003 on private equity. He has also previously taught at the University of California, Berkeley's Haas School of Business and at the Tsinghua University in Beijing, China. Mr.&nbsp;Gallin has
served on the board of directors, and sits on the audit and compensation committees, of Flash Global Logistics, a global supply logistics company, a private company, since April 2007.
Mr.&nbsp;Gallin previously served on the boards of directors of Faith Media Holdings, a book publisher, from June 2006 to December 2006, Best Brands Corp., a distributor and manufacturer of baking
products, from December 2006 to March 2009, where he was also a member of the compensation committee, Everest Connections, a broadband communications company, from June 2006 to February 2008, where he
served on the audit and compensation committees, Medispectra&nbsp;Inc., a medical device company, from February 2007 to June 2007, and Legendary Pictures, a motion picture production company, from
June 2009 to September 2010, each a private company. Prior to joining PineBridge, he worked for Kluge&nbsp;&amp;&nbsp;Co., an affiliate of Metromedia Company that is responsible for executing and
managing venture-stage, growth equity and buyout transactions. Mr.&nbsp;Gallin received B.A. and M.A. degrees in 1995 from the University of Pennsylvania and an M.B.A. degree in 2002 from Columbia
Business School. He was awarded a Fulbright Scholarship in 1995. As a professor and a professional with more than 14&nbsp;years of experience in the private equity sector and with experience serving
on numerous boards and committees, Mr.&nbsp;Gallin brings to our board of directors a unique perspective and strong financial and business acumen. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>John K. Haley</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 59, became a member of our board of directors and chair of our audit committee upon the completion of our initial public offering in
October 2010. From 1988 through September 2009, Mr.&nbsp;Haley was a partner of the international accounting firm of Ernst&nbsp;&amp; Young&nbsp;LLP, where he worked for more than 30&nbsp;years.
Mr.&nbsp;Haley served nearly 20&nbsp;years in Ernst&nbsp;&amp; Young's audit practice and from 1998 until his retirement in 2009 served in a number of leadership roles in the firm's transaction
advisory services group. Mr.&nbsp;Haley has served since September 2009 as a director of General Growth Properties,&nbsp;Inc., a landlord to approximately 31 of our stores. Mr.&nbsp;Haley has
over 30&nbsp;years of financial experience in the audit and transaction services industry. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Jerrold S. Rosenbaum</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 74, is our founder and has served as a member of our board of directors since October 2006. Before the 2006 Transaction,
Mr.&nbsp;Rosenbaum served the company in various capacities since 1972 and was our President, Chief Executive Officer and Chairman of our board of directors at the time of the 2006 Transaction,
after which he served as Vice Chairman of our board of directors. He received a B.S. degree in Business Administration in 1958 from the University of Florida. As our former Chief Executive Officer and
a founder, Mr.&nbsp;Rosenbaum brings significant historical knowledge about our merchandise, marketing and relationships with suppliers. Mr.&nbsp;Rosenbaum is Beth&nbsp;R. Angelo's father. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Carlo A. von Schroeter</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 47, has served as a member of our board of directors since 2006. Mr.&nbsp;von Schroeter is a managing partner of WestView
Capital Partners,&nbsp;L.P., a private equity group with over $500&nbsp;million in assets under management, which he co-founded in 2004. Prior to founding WestView, Mr.&nbsp;von
Schroeter was a general partner at Weston Presidio from 1992 to 2003, a private equity fund that manages approximately $3.3&nbsp;billion in capital. Mr.&nbsp;von Schroeter serves on the boards of
directors of numerous private companies, including Advanced Technology Services,&nbsp;Inc., a provider of service solutions to manufacturers, since January 2008, SpectorSoft Corporation, a provider
of PC/Internet monitoring products, since July 2008, OneNeck IT Services Corporation, a hosting and managed services </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>76</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>provider,
since June 2006, Ruffalo CODY, a fundraising and enrollment services and software provider, since June 2009 and Peerless Industrial Group, a manufacturer of industrial chains, since May
2010. Additionally, he serves on the audit and compensation committees of Advanced Technologies,&nbsp;Inc. and SpectorSoft Corporation and has previously served on the compensation committee of
Radiac Abrasives,&nbsp;Inc. from February 2007 until July 2009. Mr.&nbsp;von Schroeter is also a member of the board of directors of the New England Venture Capital Association, a
non-profit organization. He received a B.A. degree in mechanical engineering in 1986 from Queen's University in Canada and an M.B.A. degree in 1990 from Harvard Business School.
Mr.&nbsp;von Schroeter brings to our board of directors strategic insight and experience with his long career in private equity and investing in growing middle market companies for over
20&nbsp;years. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>John H. Turner</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, 50, has served as a member of our board of directors since October 2006. Mr.&nbsp;Turner is a general partner of WestView Capital
Partners,&nbsp;L.P., where he has been investing and managing portfolio investments since 2004. Prior to joining WestView, Mr.&nbsp;Turner managed $650&nbsp;million in
investment funds as a general partner at Norwest Mezzanine Partners and was a managing partner at Triumph Capital, a private equity group. Mr.&nbsp;Turner has served on the board of directors of
Titan Fitness, a private company and health club chain operator, since January 2007. Additionally, he previously served on the board of directors and audit committee of Radiac Abrasives,&nbsp;Inc.,
a private company and manufacturer of abrasive products, from February 2006 until July 2009. Mr.&nbsp;Turner received a B.A degree in economics in 1982 from the University of New Hampshire and an
M.B.A. degree in 1987 from the University of Pennsylvania's Wharton School. Mr.&nbsp;Turner brings to our board of directors over 20&nbsp;years experience investing across all tranches of the
capital structure including senior debt, mezzanine debt and equity. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Board Composition and Election of Directors  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Board Composition  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our business and affairs are managed under the direction of our board of directors. Our board of directors consists of eight members. Our by-laws
provide that our board of directors will be fixed from time to time by resolution adopted by the affirmative vote of a majority of the total directors then in office. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
board of directors is divided into three classes, with each director serving a three-year term and one class being elected at each year's annual meeting of stockholders. Messrs. von
Schroeter, Turner and Gallin serve as Class&nbsp;I directors, with an initial term expiring in 2011. Messrs.&nbsp;Rosenbaum and Weinstein and Ms.&nbsp;Angelo serve as Class&nbsp;II directors,
with an initial term expiring in 2012. Messrs.&nbsp;Doolan and Haley serve as Class&nbsp;III directors, with an initial term expiring in 2013. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Upon
expiration of the term of a class of directors, directors for that class will be elected for a new three-year term at the annual meeting of stockholders in the year in which the term
expires. Each director's term is subject to the election and qualification of his successor, or his earlier death, resignation or removal. Any vacancies on our board of directors may be filled only by
the affirmative vote of a majority of the directors then in office. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each
class will consist of one-third of the directors. This classification of our board of directors will make it more difficult for a third party to acquire control of our company. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Director Independence  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The rules of The Nasdaq Global Market require that our board be comprised of a majority of "independent directors" and that the audit committee,
compensation committee and nominating and </FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>corporate
governance committee each be comprised solely of "independent directors," as defined under applicable Nasdaq rules. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
board of directors has determined that Messrs.&nbsp;Doolan, Haley, Turner, von Schroeter and Gallin each qualify as an independent director under the corporate governance rules of The Nasdaq
Global Market. In making these determinations, our board of directors affirmatively determined that Messrs.&nbsp;von Schroeter and Turner, who are affiliated with WestView, and Mr.&nbsp;Gallin,
who is affiliated with PineBridge, our largest stockholders, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a
director. In addition, our board of directors affirmatively determined that Mr.&nbsp;Haley does not have any relationship that would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. In making this determination our board of directors considered that Mr.&nbsp;Haley sits on the board of directors of General Growth Properties,&nbsp;Inc., a
landlord to approximately 31 of our stores. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Board Committees  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our board of directors has established an audit committee, a compensation committee and a corporate governance and nominating committee. The
composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by our board of directors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Audit Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our audit committee consists of Messrs.&nbsp;Haley, Doolan and Gallin. Mr.&nbsp;Haley is the chairperson of our audit committee. Our audit
committee has responsibility for, among other things: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>selecting and hiring our independent registered certified public accounting firm and approving the audit and
non-audit services to be performed by our independent registered certified public accounting firm;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>evaluating the qualifications, performance and independence of our independent registered certified public accounting
firm;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they
relate to financial statements or accounting matters;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reviewing the adequacy and effectiveness of our internal control policies and procedures;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>discussing the scope and results of the audit with the independent registered certified public accounting firm and
reviewing with management and the independent registered certified public accounting firm our interim and year-end operating results; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>preparing the audit committee report required by the SEC to be included in our annual proxy statement. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
SEC and the Nasdaq Marketplace Rules require us to have all independent audit committee members within one year of the date of listing. We expect to have an entirely independent audit committee
within one year from October&nbsp;14, 2010. Our board of directors has affirmatively determined that Messrs.&nbsp;Haley and Doolan meet the definition of "independent directors" for purposes of
serving on an audit committee under applicable SEC and the Nasdaq Marketplace Rules. Our board of directors has also determined that Mr.&nbsp;Gallin does not meet the criteria for independence for
purposes of serving on our audit committee set forth in Rule&nbsp;10A-3 of the Exchange Act because he is </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>78</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>deemed
an affiliated person of Body Central based upon his association with PineBridge, one of our largest stockholders. In addition, Mr.&nbsp;Haley qualifies as our "audit committee financial
expert." </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
board of directors has adopted a written charter for our audit committee, which is available on our website at </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Compensation Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our compensation committee consists of Messrs.&nbsp;Doolan, Gallin and von Schroeter. Mr.&nbsp;von Schroeter is the chairperson of our
compensation committee. The compensation committee is responsible for, among other things: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reviewing and approving compensation of our executive officers including annual base salary, annual incentive bonuses,
specific goals, equity compensation, employment agreements, severance and change-in-control arrangements and any other benefits, compensation or arrangements; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reviewing succession planning for our executive officers;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reviewing and recommending compensation goals, bonus and stock compensation criteria for our employees; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>determining the compensation of our directors;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reviewing and discussing annually with management our "Compensation Discussion and Analysis" disclosure required by SEC
rules;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>preparing the compensation committee report required by the SEC to be included in our annual proxy statement;
and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>administrating, reviewing and making recommendations with respect to our equity compensation plans. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
board of directors has adopted a written charter for our compensation committee, which is available on our website at </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Corporate Governance and Nominating Committee  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our corporate governance and nominating committee consists of Messrs.&nbsp;Doolan, Haley and von Schroeter. Mr.&nbsp;von Schroeter is the
chairperson of our corporate governance and nominating committee. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
corporate governance and nominating committee is responsible for, among other things: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>assisting our board of directors in identifying prospective director nominees and recommending nominees for each annual
meeting of stockholders to our board of directors;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reviewing developments in corporate governance practices and developing and recommending governance principles applicable
to our board of directors; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>overseeing the evaluation of our board of directors and management; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>recommending members for each board committee of our board of directors. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
board of directors has adopted a written charter for our corporate governance and nominating committee, which is available on our website at </FONT> <FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Compensation Committee Interlocks and Insider Participation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>During the last fiscal year, Messrs.&nbsp;Doolan, Gallin and von Schroeter served on our compensation committee. Messrs.&nbsp;Gallin and von
Schroeter both have relationships with us that require disclosure under Item&nbsp;404 of Regulation&nbsp;S-K under the Exchange Act. See "Certain Relationships and Related Party
Transactions" for more information. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>During
the past fiscal year, none of our executive officers served as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity
that has one or more executive officers who served as members of our board of directors or our compensation committee. None of the members of our compensation committee is an officer or employee of
our company, nor have they ever been an officer or employee of our company. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Code of Business Conduct and Ethics  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our code of business conduct and ethics applies to all of our employees, officers and directors, including those officers responsible for financial
reporting. Our code of business conduct and ethics is available on our website at </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. Any amendments to the code, or any waivers of its
requirements, will be disclosed on our website. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Board Leadership Structure and Board's Role in Risk Oversight  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Mr.&nbsp;Doolan, a non-employee, independent director, serves as Chairman of our board of directors. We support separating the position
of Chief Executive Officer and Chairman to allow our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman to lead our board of directors in
its fundamental role of providing advice to, and independent oversight of, management. Our board of directors recognizes the time, effort and energy that the Chief Executive Officer is required to
devote to his position as well as the commitment required to serve as our Chairman, particularly as our board of directors' oversight responsibilities continue to grow. Our board of directors also
believes that this structure ensures a greater role for the independent directors in the oversight of our company and active participation of the independent directors in setting agendas and
establishing priorities and procedures for the work of our board of directors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>While
our by-laws and corporate governance guidelines do not require that our Chairman and Chief Executive Officer positions be separate, our board of directors believes that having separate positions
and having an independent outside director serve as Chairman is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Risk
is inherent with every business and we face a number of risks as outlined in the "Risk Factors" section of this prospectus. Management is responsible for the day-to-day
management of risks we face, while our board of directors, as a whole and through its audit committee, is responsible for overseeing our management and operations, including overseeing its risk
assessment and risk management functions. Our board of directors has delegated responsibility for reviewing our policies with respect to risk assessment and risk management to our audit committee
through its charter. Our board of directors has determined that this oversight responsibility can be most efficiently performed by our audit committee as part of its overall responsibility for
providing independent, objective oversight with </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>80</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>respect
to our accounting and financial reporting functions, internal and external audit functions and systems of internal controls over financial reporting and legal, ethical and regulatory
compliance. Our audit committee will regularly report to our board of directors with respect to its oversight of these important areas. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Compensation Policies and Practices and Risk Management  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We consider, in establishing and reviewing our compensation philosophy and programs, whether such programs encourage unnecessary or excessive risk
taking. Base salaries are fixed in amount and consequently we do not see them as encouraging risk taking. Employees are also eligible to receive a portion of their total compensation in the form of
annual cash bonus awards. While the annual cash bonus awards focus on achievement of annual goals and could encourage the taking of short-term risks at the expense of long-term
results, the Company's annual cash bonus awards represent only a portion of eligible employees' total compensation and are tied to both corporate performance measures and individual performance. We
believe that the annual cash bonus awards appropriately balance risk with the desire to focus eligible employees on specific goals important to our success and do not encourage unnecessary or
excessive risk taking. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
also provide named executive officers and other senior managers long-term equity awards to help further align their interests with our interests and those of our stockholders. We
believe that these awards do not encourage unnecessary or excessive risk taking since the awards are generally provided at the beginning of an employee's tenure or at various intervals to award
achievements or provide additional incentive to build long-term value and are subject to vesting schedules to help ensure that executives and senior managers have significant value tied to
our long-term corporate success and performance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe our compensation philosophy and programs encourage employees to strive to achieve both short- and long-term goals that are important to our success and building stockholder
value, without promoting unnecessary or excessive risk taking. We have concluded that our
compensation philosophy and practices are not reasonably likely to have a material adverse effect on us. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Director Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In connection with our initial public offering in October 2010, we revised our director compensation structure. Our executives who are members of our
board of directors do not receive compensation from us for their service on our board of directors. Only those directors who are non-executives are eligible to receive compensation from us
for their service on our board of directors. Our non-executive directors are paid: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>a base annual retainer of $25,000 in cash;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>an additional $1,000 in cash to the members of the audit, compensation and nominating and corporate governance committees
for each meeting attended;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>an additional annual retainer of $10,000 in cash to the chair of the audit committee;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>an additional annual retainer of $5,000 in cash to the chair of the compensation committee and the corporate governance
and nominating committee; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>an additional annual retainer of $25,000 in cash to the chairperson of our board of directors. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>81</FONT></P>

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<!-- ZEQ.=8,SEQ=89,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=426675,FOLIO='81',FILE='DISK135:[11ZAK1.11ZAK78401]DY78401A.;22',USER='CDESORM',CD='27-JAN-2011;12:04' -->
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
pay Mr.&nbsp;Rosenbaum $1,000 in cash per day for each real-estate site visit to assess store locations and $25,000 per year for his assessment and review of potential store locations. These
amounts are not tied to his service on our board of directors and are in addition to his $25,000 annual retainer as a member of our board of directors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
also provide certain non-executive directors with equity compensation for service on our board of directors and committees and we reimburse directors for reasonable expenses incurred to
attend meetings of our board of directors or committees. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
following table sets forth information regarding the compensation of our non-executive directors for their service on our board of directors for fiscal year 2010. </FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="182pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="125pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:27pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fees Earned or Paid in Cash ($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Option Awards ($)<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total ($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Martin P. Doolan<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,598</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>51,891</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>63,489</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Scott M. Gallin</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>John K. Haley</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8,418</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>25,942</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34,360</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Jerrold S. Rosenbaum</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Carlo A. von Schroeter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,359</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,359</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>John H. Turner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>For
stock options granted, the value set forth is the full grant date fair value, in accordance with FASB ASC 718. Valuation assumptions used
to determine the fair value of the option awards are described below: </FONT></DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>&#149; Risk-free interest rates</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 1.2%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>&#149; Expected dividend yield</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 0%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>&#149; Expected volatility</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> 69.5%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>&#149; Weighted average expected term</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5.5 years</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
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 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Fees
are paid to the Doolan Family First Limited Partnership, of which Mr.&nbsp;Doolan is managing general partner, in lieu of payment to
Mr.&nbsp;Doolan directly. </FONT></DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table summarizes the outstanding equity awards held by our non-employee directors as of the end of fiscal year 2010: </FONT></P>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Option Awards </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:27pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options (#)<BR>
Exercisable </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options (#)<BR>
Unexercisable </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Option<BR>
Exercise<BR>
Price<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Option<BR>
Expiration<BR>
Date </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Martin P. Doolan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,667<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13.00</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10/14/20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>John K. Haley</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,333<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13.00</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10/14/20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Options
granted were to the Doolan Family First Limited Partnership, of which Mr.&nbsp;Doolan is managing general partner, and is therefore
deemed to beneficially own the options held by it. These options vest in full on October&nbsp;14, 2011.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Options
vest in full on October&nbsp;14, 2011. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>82</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ea78401_executive_compensation"> </A>
<A NAME="toc_ea78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  EXECUTIVE COMPENSATION    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Compensation Discussion and Analysis  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The purpose of this compensation discussion and analysis section is to provide information about the material elements of compensation that are paid,
awarded to, or earned by, our "named executive officers," who consist of our principal executive officer, principal financial officer and our other most highly compensated executive officer. We do not
have any other executive officers. For fiscal year 2010, our named executive officers, were: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Allen Weinstein, President, Chief Executive Officer and Director;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Beth Angelo, Chief Merchandising Officer, Executive Vice President, President of Direct Sales and Director;
and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Richard Walters, Executive Vice President, Treasurer and Chief Financial Officer. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Historical Compensation Decisions  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Prior to our initial public offering on October&nbsp;14, 2010, we were a privately held company with a relatively small number of stockholders,
including our principal stockholders, WestView and PineBridge. As a result, we were not previously subject to any stock exchange listing or SEC rules requiring a majority of our board of directors to
be independent or relating to the formation and functioning of board committees, including audit, compensation and nominating committees. Most, if not all, of our prior compensation policies and
determinations, including those made for fiscal year 2010, have been the product of discussions between our Chief Executive Officer and our compensation committee existing prior to our initial public
offering. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
compensation committee will review our existing compensation approach to determine whether such approach is appropriate given that we are now a public company. Accordingly, the compensation paid
to our named executive officers for fiscal year 2010 is not necessarily indicative of how we will compensate our named executive officers in the future. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Compensation Philosophy and Objectives  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our compensation committee reviews and approves the compensation of our named executive officers and oversees and administers our executive
compensation approach and initiatives. We believe that our executive compensation approach motivates our named executive officers by balancing fixed versus variable payments and cash payments versus
equity awards. Our
executive compensation approach is based upon a philosophy that is designed to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>attract and retain talented and experienced executives in our industry;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>reward executives whose knowledge, skills and performance are critical to our success;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>align the interests of our executive officers and stockholders by motivating executive officers to increase stockholder
value and rewarding executive officers when stockholder value increases; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>recognize the contributions each executive officer makes to our success. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
compensation committee meets outside the presence of all of our named executive officers to consider appropriate compensation for our Chief Executive Officer. For all other named executive
officers, the compensation committee meets outside the presence of all named executive officers except our Chief Executive Officer. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>83</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Historically,
compensation has been highly individualized, the result of arm's-length negotiations and based on a variety of informal factors including, in addition to the factors listed above, our
financial condition and available resources, our need for a particular position to be filled and the compensation levels of our other executive officers. In addition, we informally considered the
competitive market for corresponding positions within the specialty retail apparel industry. This informal consideration was based on the general knowledge possessed by members of our compensation
committee and our Chief Executive Officer regarding the compensation given to some of the executive officers of other companies in our industry through informal benchmarking. In the case of
Mr.&nbsp;Weinstein's compensation, the compensation committee also conducted informal benchmarking against the
competitive market and relied on the recommendation of the search firm hired to fill the Chief Executive Officer position. As a result, our compensation committee historically has applied its
discretion to make compensation decisions and set the compensation for each named executive officer on an individual basis. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
Chief Executive Officer will review annually with the compensation committee each named executive officer's performance and recommend appropriate base salary, cash performance awards and grants of
equity incentive awards. Based upon the recommendations from our Chief Executive Officer and in consideration of the objectives described above and the principles described below, the compensation
committee will approve the annual compensation packages of our named executive officers other than our Chief Executive Officer. The compensation committee or the full board of directors, upon
recommendation of the compensation committee, will also annually analyze our Chief Executive Officer's performance and determine his base salary, cash performance awards and grants of equity incentive
awards based on its assessment of his performance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Elements of Compensation  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our current executive compensation approach, which was set by our compensation committee with input from our Chief Executive Officer, consists of the
following components: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>base salary;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>annual cash incentive awards linked to corporate and individual performance;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>periodic grants of stock options; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>other executive benefits and perquisites. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Executive
compensation includes both fixed compensation (base salary, benefits and executive perquisites) and variable compensation (annual bonus and stock option grants). Each component is linked to
one or more of the compensation philosophy objectives listed above. The fixed compensation is designed to induce talented executives to join or remain with our company. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Variable
cash incentive awards are tied specifically to the achievement of our annual financial objectives and individual performance. Bonus amounts generally relate to the scope of responsibility for
each named executive officer. Our bonus awards are designed to align each executive's annual goals for his or her respective area of responsibility with the financial goals of the entire business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
other element to variable compensation is stock option awards. Our 2006 Equity Incentive Plan was adopted by our board of directors to award stock options to executive officers and other key
employees. Prior to our initial public offering, the grants awarded had no public market and no certain opportunity for liquidity until the completion of our initial public offering, making them
inherently long-term compensation. The awards have been used to motivate executives and employees to individually and collectively build long-term stockholder value. In
connection with our initial public </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>84</FONT></P>

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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>offering,
we amended and restated our equity incentive plan, which became effective upon completion of our initial public offering. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
compensation committee has engaged Mercer (US) Inc., a compensation consulting firm, to evaluate our fiscal 2011 compensation packages. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Base Salary  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Historically, base salary has been the primary component of our compensation packages as it provides a constant and consistent source of income to
our named executive officers. The base salary established for each of our named executive officers is intended to reflect each individual's professional responsibilities, the skills and experience
required for the job, their individual performance, business performance and a competitive salary based on market comparables. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Typically,
base salaries are reviewed annually by our compensation committee with input from our Chief Executive Officer, for base salaries other than the Chief Executive Officer, and may be increased
depending on business circumstances and individual situations. In past years, our compensation
committee determined base salaries partially based on our named executive officers' experience in the industry with reference to the base salaries of similarly situated executives in other companies
of similar size and stage of development operating in the specialty retail apparel industry, such as rue21, Wet Seal, Charlotte Russe, Zumiez and CitiTrends. This determination is informal and based
primarily on the general knowledge of our Chief Executive Officer and compensation committee members of the practices within our industry. With this information, the compensation committee sets the
salary levels for each named executive officer and determines whether to award a salary increase. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
fiscal year 2010, our named executive officers received the following in annual base salary: $400,000 for Mr.&nbsp;Weinstein (of which he received $382,692 based on his salary increase described
in the paragraph below); $350,000 for Ms.&nbsp;Angelo and $304,200 for Mr.&nbsp;Walters. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
2010, Mr.&nbsp;Weinstein received a salary increase from $350,000 to $400,000 to align his base salary with that of similarly situated chief executive officers. There were no other salary
increases or decreases in 2010. Effective March&nbsp;1, 2011, Mr.&nbsp;Walters' base salary will be increased to $350,000. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
compensation committee, with input from the Chief Executive Officer, will annually review base salaries and set salaries for the fiscal year that are competitive and aim to retain our executives.
The salaries may be set based on recommendations by compensation consultants, formal benchmarking against a particular set of comparable companies or survey data. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Bonus Awards  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our compensation committee, with input from our Chief Executive Officer other than for his own bonus, determines annual cash bonus awards to our
named executive officers. The annual cash bonuses are intended to reward the achievement of corporate objectives linked to our financial results. We believe that our bonus awards help us attract and
retain qualified and highly skilled executives and reward and motivate named executive officers who have had a positive impact on corporate results. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Historically,
on an annual basis, our compensation committee typically has set aside a bonus pool for executive officers and key employees with bonuses paid out, if at all, based on positive financial
performance and at the compensation committee's sole discretion. Each named executive officer is eligible to receive a bonus award from the bonus pool, based on his or her position with our company
and the compensation committee's determination of the officer's individual contribution to our financial performance. The bonus percentages were not established in advance, but were based on
achievement of strong financial performance and the individual's contribution to the achievement of corporate performance, with full discretion to award any bonus resting with the compensation
committee. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>85</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>For
fiscal year 2010, the compensation committee established a bonus plan for executive officers and key employees based on EBITDA targets. Each of our named executive officers is eligible to receive
a bonus award from the bonus pool based on (1)&nbsp;achievement of the EBITDA target, (2)&nbsp;his or her position with the company and (3)&nbsp;his or her relative contribution to the
achievement of the EBITDA target. The awards may be adjusted upward or downward based on the compensation committee's determination of an individual's contribution to the achievement of the EBITDA
targets. We expect the bonus plan to work on a sliding scale in which executives will be able to share in any financial upside and forgo full bonus awards in the case of financial downside. For
example, under this bonus plan: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>if we achieve $18.5&nbsp;million of EBITDA, the executive officers and key employees will share in the bonus pool; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>if we achieve over $18.5&nbsp;million of EBITDA, the bonus pool will increase proportionately with the increase in
EBITDA and similarly if we fail to achieve $18.5&nbsp;million of EBITDA, our bonus pool will decrease proportionately; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>if we achieve $14.8&nbsp;million of EBITDA or less, no bonus amounts will be awarded. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
future years we expect our bonus awards to operate similarly to the 2010 bonus plan with net income rather than EBITDA as the metric by which our corporate performance is measured for bonus plan
purposes. We expect target bonuses, reflected as a percentage of base salary, to be set at the beginning of each fiscal year measured against pre-determined net income targets and that
bonuses will be awarded based on achievement of those targets while considering the individual's contribution to our performance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
granted Mr. Walters a one time discretionary bonus totaling $20,000 upon completion of our initial public offering to reward Mr.&nbsp;Walters for his work on that offering. In addition, we
awarded Mr.&nbsp;Weinstein, Mr.&nbsp;Walters and Ms.&nbsp;Angelo amounts under the terms of our success bonus plan upon
completion of our initial public offering. See "&nbsp;&#151;Success Bonus Plan" for more information. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Equity-Based Compensation  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our compensation committee believes that equity-based compensation is an important component of our executive compensation approach and that
providing a significant portion of our named executive officers' total compensation package in equity-based compensation aligns the incentives of our named executive officers with the interests of our
stockholders and with our long-term corporate success. Additionally, our compensation committee believes that equity-based compensation awards enable us to attract, motivate, retain and
adequately compensate executive talent. To that end, we have awarded equity-based compensation in the form of options to purchase shares of our common stock. Our compensation committee believes stock
options provide our named executive officers with a significant long-term interest in our success by rewarding the creation of stockholder value over time. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Generally,
each named executive officer is provided with a stock option grant when he or she joins our company based upon his or her position with us and his or her relevant prior experience. Each of
our stock option grants generally vests over the course of four years with 25% of the shares vesting on the first anniversary of the grant date or employment date, as applicable, and the remainder of
the shares vesting in 12 equal quarterly installments. In addition to stock options granted upon commencement of employment with us, our compensation committee may grant additional stock options to
retain our executives and to recognize the achievement of corporate and individual goals. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Stock
options are granted with an exercise price equal to or greater than the fair value of our stock on the applicable date of grant. Prior to the completion of our initial public offering, our
compensation committee determined fair value for purposes of stock option pricing based on the compensation committee's own good-faith analysis after review of our performance at the time
the options were </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>86</FONT></P>

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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>granted.
For future grants, as a public company, fair value will be based on the closing price of our common stock on The Nasdaq Global Market on the date of grant. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
general, stock option grants to our named executive officers are determined at the discretion of our compensation committee. In addition, our compensation committee also considers a named executive
officer's current position with our company, the size of his or her total compensation package and the amount of existing vested and unvested stock options, if any, then held by the executive officer.
No formal benchmarking efforts are made by our compensation committee with respect to the size of
option grants made to executive officers and, in general, the determination process is informal. Historically, our compensation committee has made all stock option grant decisions with respect to our
named executive officers. The compensation committee intends to formalize this process with annual grants and may use formal bench-marking efforts to determine grant amounts. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>No
equity awards were granted to our named executive officers in fiscal&nbsp;2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Other Executive Benefits and Perquisites  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We provide the following benefits to our named executive officers to attract and retain qualified and highly skilled
executives: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>health insurance, including payment of 100% of the insurance premium;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>four&nbsp;weeks paid vacation;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>short-term disability as provided in certain named executive officer's employment agreements; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>automobile allowance of $1,000 a month; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>term life insurance for Mr.&nbsp;Weinstein and Mr.&nbsp;Walters. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
also provide for the reimbursement of travel expenses to our named executive officers. In May 2010, we provided $20,000 in living and travel expenses to Mr.&nbsp;Weinstein related to fiscal year
2009
and reimbursed Mr.&nbsp;Walters $20,000 for certain relocation expenses for his relocation to Jacksonville, Florida in fiscal year 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Severance and Change-in-Control Benefits  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We have entered into employment agreements with the named executive officers that contain severance benefits, the terms of which are described under
the heading "&#151;Employment Agreements and Potential Payments Upon Termination or Change-in-Control." We believe these severance benefits are essential elements of our
executive compensation package by assisting in recruiting and retaining talented executives. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Section&nbsp;162(m) Compliance  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Section&nbsp;162(m) of the Code limits us to a deduction for federal income tax purposes of no more than $1.0&nbsp;million of compensation paid
to certain executive officers in a taxable year. Compensation above $1.0&nbsp;million may be deducted if it is "performance-based compensation" within the meaning of the Code. Our board of directors
believes that we should be able to continue to manage our executive compensation for our named executive officers so as to preserve the related federal income tax deductions, although individual
exceptions may occur. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>87</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Success Bonus Plan  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We adopted a success bonus plan on April&nbsp;10, 2007, which provided for the grant of up to an aggregate of $1.0&nbsp;million in bonuses to
specified employees payable upon the closing of either an initial public offering or certain change of control events defined in the success bonus plan. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
October 2010, as a result of the closing of our initial public offering, Mr.&nbsp;Weinstein, Mr.&nbsp;Walters and Ms.&nbsp;Angelo received awards totaling $15,000, $30,000 and $10,000,
respectively, under the terms of the success bonus plan. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>88</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Summary Compensation Table  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table sets forth certain information regarding compensation for fiscal years 2008, 2009 and 2010 awarded to or earned by our named
executive officers. </FONT></P>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="7pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="26pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="39pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="88pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:89pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Name and Principal Position

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal<BR>
Year </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Salary ($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Non-Equity<BR>
Incentive Plan<BR>
Compensation </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Bonus<SUP>(4)</SUP><BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Option Awards<BR>
($)<SUP>(5)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>All Other<BR>
Compensation<BR>
($)<SUP>(6)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Total<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


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 B. Allen Weinstein<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2010</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>382,692</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>15,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>29,452</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>427,144</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><I>


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 President&nbsp;&amp; CEO</I></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2009</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>134,615</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>107,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>496,342</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>31,073</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>769,530</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


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</FONT>
</TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2008</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Richard L. Walters</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
2010</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
304,200</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
30,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
20,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
65,332</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
419,532</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><I>Executive VP&nbsp;&amp; CFO</I></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2009</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>304,200</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>50,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>40,072</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>394,272</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2008</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>304,119</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>50,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,954</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>72,454</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>453,527</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Beth R. Angelo</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
2010</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
350,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
10,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
32,921</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
392,921</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><I>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Executive VP&nbsp;&amp; CMO</I></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2009</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>319,230</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>86,436</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>248,171</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34,908</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>688,745</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2008</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>300,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>75,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,954</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>30,349</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>432,303</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#3B5A6F" SIZE="1.0PT" WIDTH="39%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#3B5A6F" SIZE="1.0PT" WIDTH="39%" ALIGN="LEFT" >


<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Mr.&nbsp;Weinstein
joined us as our President and Chief Executive Officer on August&nbsp;3, 2009.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
amounts awarded under our Success Bonus Plan. The amounts earned for fiscal 2010 pursuant to our bonus plan are not determinable as
of the date hereof. We expect to determine the bonuses payable in March 2011 in connection with the audit of our fiscal 2010 financial statements.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
amounts awarded under incentive bonus plans in effect in each fiscal year.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
a discretionary bonus award made in connection with our initial public offering.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(5)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>For
stock options granted, the value set forth is the full grant date fair value, in accordance with FASB ASC 718. Valuation assumptions used
to determine the fair value of the option awards are described in the notes to the financial statements appearing elsewhere in this prospectus.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(6)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
amounts paid on behalf of each of the named executive officers for the following respective categories of compensation: 401(k)
matching contributions for eligible employees; term life insurance; car allowance; health premiums and medical reimbursements and other personal benefits. The amounts included in that column for each
of the named executive officers include the following: </FONT></DD></DL>
 </DIV>

 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="26pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="31pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="41pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="31pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="36pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:19pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Name

<!-- COMMAND=ADD_SCROPPEDRULE,19pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Fiscal<BR>
Year </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>401(k)<BR>
Match<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Health<BR>
Premiums<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Medical<BR>
Reimbursement<BR>
($)<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Term<BR>
Life<BR>
Insurance<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Automobile<BR>
Allowance<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Other<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Total($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 B. Allen Weinstein</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>15,795</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,640</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>29,452</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6,066</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>31,073</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Richard L. Walters</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
6,096</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
15,795</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
10,494</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
947</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
12,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
20,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR><SUP>(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
65,332</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6,095</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,192</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6,838</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>947</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>40,072</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,715</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,922</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,507</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>947</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34,363</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>72,454</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Beth R. Angelo</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
3,346</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
15,795</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
1,763</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
12,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
32,921</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,345</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,192</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,354</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34,908</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:7pt;text-indent:-7pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4,715</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,922</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>695</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>12,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>30,349</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#3B5A6F" SIZE="1.0PT" WIDTH="39%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#3B5A6F" SIZE="1.0PT" WIDTH="39%" ALIGN="LEFT" >


<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
named executive officers receive reimbursements of up to $10,000 for medical expenses not covered by our benefits plans. This benefit
terminated with the completion of our initial public offering.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
temporary living expenses.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
reimbursement for certain relocation expenses for Mr.&nbsp;Walters' relocation to Jacksonville, Florida.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Includes
commuting cost and temporary living expenses. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>89</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=97,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=345542,FOLIO='89',FILE='DISK135:[11ZAK1.11ZAK78401]EC78401A.;22',USER='MSULLIV',CD='27-JAN-2011;08:33' -->
<A NAME="page_ec78401_1_90"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 2010 Grants of Plan-Based Awards  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>None of our named executive officers received equity awards in fiscal year 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Outstanding Equity Awards at Fiscal Year End 2010  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table sets forth certain information with respect to outstanding equity awards of each of our named executive officers as of fiscal
year end 2010 (January&nbsp;1, 2011): </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ec78401_option_awards"> </A>
<A NAME="toc_ec78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  Option Awards    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="44pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="150pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="149pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="75pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:21pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Name

<!-- COMMAND=ADD_SCROPPEDRULE,21pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Grant<BR>
Date </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number of Securities Underlying<BR>
Unexercised Options<BR>
(#) Exercisable<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number of Securities<BR>
Underlying Unexercised Options<BR>
(#) Unexercisable<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Option<BR>
Exercise<BR>
Price<SUP>(1)</SUP> </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Option<BR>
Expiration Date </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 B. Allen Weinstein</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7/7/09</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>122,259</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>268,969</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3.94</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>10/12/19</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Richard L. Walters</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8/15/07</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>134,135</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3.94</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8/15/17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2/7/08</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>24,452</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>11,114</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>0.98</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2/7/18</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Beth R. Angelo</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
2/7/08</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
24,452</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
11,114</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
0.98</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR>
2/7/18</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>10/12/09</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>61,129</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>134,485</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3.94</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>10/12/19</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
options have a term of 10 years and generally vest in accordance with the following schedule: 25% of the total number of shares vest on
the first anniversary of either the grant date or employment date, as applicable, and the remaining shares vest in 12 equal quarterly installments. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Options Exercised and Stock Vested  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>None of our named executive officers exercised stock options in fiscal year 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Pension Benefits  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We do not sponsor defined benefit plans. Consequently, our named executive officers did not participate in, or have account balances in, qualified or
nonqualified defined benefit plans. Our board of directors or compensation committee may elect to adopt qualified or nonqualified defined benefit plans in the future if it determines that doing so is
in our best interest. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Nonqualified Deferred Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We do not maintain nonqualified defined contribution plans or other deferred compensation plans. Consequently, our named executive officers did not
participate in, or have account balances in, nonqualified defined contribution plans or other nonqualified deferred compensation plans. Our board of directors or compensation committee may elect to
provide our executive officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our
best interest. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Employment Agreements and Potential Payments Upon Termination or Change-in-Control  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Employment Agreements  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We have entered into employment agreements with each of our named executive officers as described below. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Allen Weinstein&nbsp;&#151; </I></FONT><FONT COLOR="#3B5A6F" SIZE=2>On July&nbsp;8, 2009, we entered into an employment agreement with Mr.&nbsp;Weinstein which provides for an
annual base salary of $350,000 (which was later increased to $400,000), subject to increase by our board of directors, a discretionary bonus, the grant of stock options and four weeks of paid
vacation. In addition, it provides a $1,000&nbsp;monthly car allowance, use of a cell phone, health care coverage, reimbursement of reasonable travel, entertainment and other business expenses and
premium payments on a $50,000 life insurance policy. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>90</FONT></P>

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 </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Beth Angelo&nbsp;&#151; </I></FONT><FONT COLOR="#3B5A6F" SIZE=2>On October&nbsp;14, 2010, we entered into an employment agreement with Ms.&nbsp;Angelo
which provides for a base salary of $350,000 annually, subject to adjustment by our board of directors, a discretionary bonus, and four weeks of paid vacation. In addition, it provides a
$1,000&nbsp;monthly car allowance, health care coverage and reimbursement of reasonable travel, entertainment and other business expenses. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Richard Walters&nbsp;&#151; </I></FONT><FONT COLOR="#3B5A6F" SIZE=2>On November&nbsp;27, 2007, we entered into an employment agreement with Mr.&nbsp;Walters which provides for an
annual base salary of $304,200, (which was subsequently increased by an amendment to the employment agreement to $350,000 effective March&nbsp;1, 2011) subject to adjustment by our board of
directors, a discretionary bonus and four weeks of paid vacation. In addition, it provides a $1,000&nbsp;monthly car allowance and reimbursement of reasonable travel, entertainment and other
business expenses. The agreement also provides for annual premium payments of up to $930 on an existing term life insurance policy and health care coverage. On January&nbsp;24, 2011, in connection
with the amendment to Mr.&nbsp;Walters' employment agreement, he was granted stock options to purchase 18,500 shares of our common stock, which vest 25% on January&nbsp;24, 2012, with the balance
vesting in equal amounts over the following 12 consecutive quarters. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Termination of Employment Agreements and Change-in-Control Arrangements  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The information below describes and quantifies certain compensation that would become payable under each named executive officer's employment
agreement if, as of January&nbsp;1, 2011, their employment agreements were in effect and their employment with us had been terminated. Due to the number of factors that affect the nature and amount
of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any
such event. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
employment agreements for our named executive officers provide for compensation in the event of termination of their employment due to death or disability, without cause, and by the executive for
good reason. In general, these employment agreements contain the following termination-related provisions: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Termination Due to Death or Disability.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Severance payments
equal to any unpaid portion of the executive's base salary, any unpaid bonus from prior years, and any other unpaid amounts and benefits to which the executive is entitled as of the termination of the
executive's employment under any of our compensation plans and programs, the aggregate reduced by any insurance or disability benefits paid to the executive under our benefit plans. </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Termination Without Cause or for Good Reason.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Severance
payments equal to the executive's base salary for the period described below, any unpaid bonus from prior years, and any other unpaid amounts and benefits to which the executive is entitled as of the
termination of employment under any of our compensation plans and programs.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Severance.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Receipt of any severance and benefits upon
termination without cause or for good reason is conditioned on the executive signing a release and waiver of claims in a form satisfactory to us.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Non-competition.</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Our executive officers are also generally
prohibited from disclosing confidential information and trade secrets, soliciting any employee, vendor or customer for two&nbsp;years following termination of their employment and working with or
for any competing companies during their employment and for one&nbsp;year thereafter. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>91</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>"For Cause."</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Under the employment agreements, "cause"
generally means (i)&nbsp;a material failure of the executive in performing his or her duties, (ii)&nbsp;willful misconduct, (iii)&nbsp;an act of moral turpitude, (iv)&nbsp;conviction of, or
guilty plea or nolo contendere to, a felony or crime involving fraud, dishonesty or moral turpitude, (v)&nbsp;material breach of his or her employment agreement or a material policy or
(vi)&nbsp;any breach of fiduciary duties of loyalty and trust.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>"Good Reason."</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;Under the employment agreements, "good
reason" generally means (i)&nbsp;a reduction in the executive's responsibilities without his or her consent, (ii)&nbsp;attempted or actual relocation of the executive's principal workplace beyond
a 50 mile radius of our location or (iii)&nbsp;our failure to provide the executive's compensation, benefits and perquisites under his or her employment agreement. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Allen Weinstein&nbsp;&#151; </I></FONT><FONT COLOR="#3B5A6F" SIZE=2>If Mr.&nbsp;Weinstein terminates his employment for good reason, he must provide us with 90&nbsp;days' prior
written notice. Mr.&nbsp;Weinstein would receive 12&nbsp;months of his annual base salary if his employment is terminated without cause or for good reason. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Beth Angelo&nbsp;&#151; </I></FONT><FONT COLOR="#3B5A6F" SIZE=2>Differing from the general provisions described above, if Ms.&nbsp;Angelo terminates her employment for good reason,
she must provide us with 60&nbsp;days' prior written notice. Ms.&nbsp;Angelo would receive 12 months of her annual base salary if her employment is terminated without cause or for good reason. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Richard Walters&nbsp;&#151; </I></FONT><FONT COLOR="#3B5A6F" SIZE=2>Differing from the general provisions described above, and in addition to 12&nbsp;months of his annual base
salary if Mr.&nbsp;Walters is terminated without cause or for good reason, Mr.&nbsp;Walters would receive severance payments for 12 months if he terminates his employment with us for any reason
after his family has relocated to Florida by providing six months' prior written notice
and complying with confidentiality, non-solicitation and non-compete requirements of his agreement for one&nbsp;year following such termination. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Under
our Plan, in the event of a merger, consolidation, sale of all or substantially all of our assets, sale or exchange of all our common stock for cash, securities or other property or our
liquidation or dissolution, the compensation committee shall have the discretion to provide for any or all of the following: (a) the assumption of outstanding options or the substituting of equivalent
rights by the acquiring or succeeding entity; (b)&nbsp;the termination of all unexercised options immediately prior to the transaction unless exercised within a specified period; (c)&nbsp;the
exercise of outstanding options (in whole or in part) prior to or upon the transaction; (d)&nbsp;cash payments to be made to holders equal to the excess, if any, of the acquisition price over the
exercise price (net of tax withholdings); (e)&nbsp;the conversion of options into the right to receive liquidation proceeds in connection with our liquidation or dissolution; or (f)&nbsp;any
combination of the foregoing. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Under
the individual stock option agreements entered into with each of our named executive officers, under the Plan prior to its amendment and restatement, any unvested stock options represented by
the agreements will fully vest immediately prior to the closing of a merger, consolidation or sale of all or substantially all of our assets, in which our stockholders, together with any affiliates,
do not own or hold, immediately after the merger, consolidation or sale, at least 25% of the total voting power of the outstanding capital stock of the acquiring party. In the event of a termination
of employment (other than for death or disability), the option remains exercisable to the extent vested for a period of 90&nbsp;days from the date of termination. In the event a named executive
officer's employment is terminated due to death or disability, the option remains exercisable to the extent vested for a period of 365&nbsp;days from the date of termination. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>92</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
following table sets forth the amounts of compensation payable by us to our named executive officers, including cash severance, benefits and perquisites and long-term incentives. The
amounts shown assume that the specified event was effective as of January&nbsp;1, 2011 under their employment agreements. The actual amounts to be paid can only be determined at the time of the
termination of employment or change-in-control, as applicable. </FONT></P>
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<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="84pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="92pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="92pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="92pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Benefits and<BR>
Payments </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Termination by<BR>
Company<BR>
Without&nbsp;Cause<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Employee<BR>
Resignation&nbsp;for<BR>
Good Reason<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Termination Due<BR>
to Death<BR>
or Disability<BR>
($) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Change-in-<BR>
Control<BR>
($) </B></FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


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 B. Allen Weinstein</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Base Salary</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>400,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>400,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


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</FONT>
</TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Bonus</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>



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</FONT>
</TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Stock Options</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>4,166,578<SUP>(5)</SUP></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Richard L. Walters</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Base Salary</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>304,200</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>304,200</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Bonus</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Stock Options</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>1,912,591<SUP>(5)</SUP></FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


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 Beth R. Angelo</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Base Salary</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>350,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>350,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


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</FONT>
</TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Bonus</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><p style="font-family:times;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>


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</FONT>
</TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Stock Options</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>&#151;<SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p align=left style="font-family:times;margin-top:9pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>2,556,692<SUP>(5)</SUP></FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>In
the event of termination due to death or disability, the named executive officers would receive any accrued and unpaid base salary.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>In
the event of termination, the named executive officers would receive any accrued and unpaid bonus amounts. The amounts earned for fiscal
2010 pursuant to our bonus plan are not determinable as of the date hereof. We expect to determine the bonuses payable in March 2011 in connection with the audit of our fiscal 2010 financial
statements.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>In
the event the named executive officer's employment is terminated, except due to death or disability, only vested options remain exercisable
for a period of 90 days from the date of termination.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>In
the event the named executive officers are terminated due to death or disability, only vested options remain exercisable for a period of
365 days from the date of termination.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(5)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
the difference between the closing price of our common stock on January&nbsp;3, 2011 ($14.59), the first trading day following
January&nbsp;1, 2011, and the exercise price of the options held by each named executive officer. </FONT></DD></DL>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Amended and Restated 2006 Equity Incentive Plan  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our board of directors adopted our 2006 Equity Incentive Plan, effective September&nbsp;29, 2006, which was amended in July 2007 to modify the
definition of change in control and amended and restated upon completion of our initial public offering. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
of January 21, 2011, no shares of common stock had been issued upon the exercise of options granted under the Plan and options to purchase 495,146 shares were vested and unexercised under the Plan. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
following is a summary of the material terms of the Plan, which became effective upon completion of our initial public offering. The summary does not include all of the provisions of the Plan. For
further information about the Plan before its amendment and restatement, we refer you to the complete copy of the 2006 Equity Incentive Plan, which we included as an Exhibit to our registration
statement for our initial public offering. For further information about the Plan, we refer you to the complete copy of the Plan, which we included as an Exhibit to our registration statement of which
this prospectus is a part. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Plan provides for the grant of incentive stock option and nonstatutory stock options, which we collectively refer to as "awards" or "options" in connection with the Plan. Non-employee directors
and </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>93</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>officers
and other employees of us and our affiliates, as well as others performing consulting services for us, are eligible for grants under the Plan. The purpose of the Plan is to encourage
ownership of our common stock by our employees, consultants and directors and to provide additional incentives for them to promote the success of our business. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Administration  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The compensation committee of the board of directors administers the Plan, although the board itself also may exercise any of the powers and
responsibilities under the Plan. Subject to the terms of the Plan, the compensation committee will select the recipients of options and determine, among other things, the: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>number of shares of common stock covered by the options and the dates upon which such options become exercisable; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>type of option and the exercise price and method of payment for each such option;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>vesting period for options and any potential acceleration of vesting; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>duration of options. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Available Shares  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The aggregate number of shares of our common stock which may be issued or subject to outstanding awards under the Plan may not exceed
1,646,209&nbsp;shares, which may be either authorized and unissued shares of our common stock or shares of common stock held in our treasury. In general, if awards under the Plan are for any reason
cancelled, or expire or terminate, without having been exercised in full, the number of shares covered by such awards that were not purchased will again be available for the grant of awards under the
Plan. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Eligibility for Participation  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Non-employee members of our board of directors, as well as employees of, and consultants to, us or any of our subsidiaries and affiliates are
eligible to receive awards under the Plan. The selection of participants is within the sole discretion of the compensation committee. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Incentive Stock Options  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Incentive stock options are intended to qualify as incentive stock options under Section&nbsp;422 of the Internal Revenue Code of 1986, as amended,
and will be granted pursuant to incentive stock option agreements. The compensation committee will determine the exercise price for an incentive stock option, which may not be less than 100% of the
fair market value of the stock underlying the option determined on the date of grant. In addition, incentive options granted to employees who own, or are deemed to own, more than 10% of the combined
voting power of our stock, must have an exercise price not less than 110% of the fair market value of the stock underlying the option determined on the date of grant. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Nonstatutory Stock Options  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Nonstatutory stock options are not intended to qualify as incentive stock options under Section&nbsp;422 of the Internal Revenue Code of 1986, as
amended, and will be granted pursuant to nonstatutory stock option agreements. The compensation committee will determine the exercise price for a nonstatutory </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>94</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>stock
option, which may not be less than the fair market value of the stock underlying the option determined on the date of grant. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Transferability  </I></B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Awards granted under the Plan are generally nontransferable (other than by will or the laws of descent and distribution), except that the
compensation committee may provide for the transferability of nonstatutory stock options at the time of grant or thereafter to certain family members. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Changes to Capital Structure  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the event of certain types of changes in our capital structure, such as a share split, the number of shares reserved under the plan and the number
of shares and exercise price of all outstanding awards will be appropriately adjusted. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Change of Control  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the event of a merger, consolidation, sale of all or substantially all of our assets, sale or exchange of all our common stock for cash,
securities or other property or our liquidation or dissolution, the compensation committee shall have the discretion to provide for any or all of the following: (a)&nbsp;the assumption of
outstanding options or the substituting of equivalent rights by the acquiring or succeeding entity; (b)&nbsp;the termination of all unexercised options immediately prior to the transaction unless
exercised within a specified period; (c)&nbsp;the exercise of outstanding options (in whole or in part) prior to or upon the transaction; (d)&nbsp;cash payments to be made to holders equal to the
excess, if any, of the acquisition price over the exercise price (net of tax withholdings); (e)&nbsp;the conversion of options into the right to receive liquidation proceeds in connection with our
liquidation or dissolution; or (f)&nbsp;any combination of the foregoing. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Amendment and Termination  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Subject to the limitations specified in the Plan, our board of directors may at any time amend any or all of the provisions of the Plan, or terminate
it entirely. Except as otherwise provided in the Plan, the rights of a participant under awards outstanding at the time of any amendment or modification may not be impaired without the consent of the
participant. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Limitation of Liability and Indemnification of Officers and Directors  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As permitted by Delaware law, our certificate of incorporation and by-laws will provide that we will indemnify our directors and officers to the
fullest extent permitted by Delaware law. We have in place directors' and officers' liability insurance that insures our directors and officers against the costs of defense, settlement or payment of a
judgment under certain circumstances. See "Certain Relationships and Related Party Transactions&#151;Indemnification of Officers and Directors." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>95</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<A NAME="toc_eg78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We describe below transactions during our last three fiscal years to which we were a party or will be a party, in which: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the amounts involved exceeded or will exceed $120,000; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>any of our directors, executive officers, holders of more than 5% of our common stock or any member of their immediate
family had or will have a direct or indirect material interest. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Stockholders' Agreement  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On October&nbsp;1, 2006, we entered into a stockholders' agreement with WestView Capital Partners,&nbsp;L.P., entities advised by PineBridge
Investments (formerly AIG&nbsp;Investments), George Kolber, The Doolan Family First Limited Partnership, of which Martin Doolan, our director, is managing general partner, Jerrold Rosenbaum, Beth
Angelo, Laurie Bauguss, Curtis Hill,&nbsp;GVK,&nbsp;LP, an entity affiliated with a former officer, and Terbell Partners, Ltd. The agreement provided, among other things, that three members of our
board of directors will be designated by WestView, one member by PineBridge, and two members by the holders of a majority of the shares of Series&nbsp;B preferred stock. Additionally, WestView and
PineBridge could nominate two members and one member, respectively, to our three-member compensation committee. This agreement terminated by its terms upon completion of our initial public offering. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Registration Rights Agreement  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On October&nbsp;1, 2006, we entered into a registration rights agreement with WestView, entities advised by PineBridge, George Kolber, The Doolan
Family First Limited Partnership, Jerrold Rosenbaum, Beth Angelo, Laurie Bauguss, Curtis Hill,&nbsp;GVK,&nbsp;LP and Terbell Partners, Ltd. The agreement provides specified stockholders with
certain demand and "piggyback" registration rights and other registration rights, subject to lock-up arrangements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Demand and Piggyback Registration Rights  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Pursuant to our registration rights agreement, specified holders of our common stock issued upon conversion of our Series&nbsp;A preferred stock
have the right at any time, but on not more than three occasions, to require us to register any or all of their shares under the Securities Act at our expense. Following a demand, all other holders of
registrable securities may request the inclusion of any or all of their shares in the registration statement. Our obligations pursuant to this demand registration right is limited to offerings in
which at least 80% of the securities to be registered are anticipated to be sold to the public. Under some circumstances, we may delay filing a registration statement for up to 180&nbsp;days in a
12-month period. Additionally, all holders of registrable securities are entitled to request the inclusion of any of their shares in any registration statement, with some exceptions, at
our expense whenever we propose to register any of our securities under the Securities Act. All demand and piggyback registration rights are subject to limitations that may be imposed by the managing
underwriter on the number of shares to be included in the underwritten offering. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Short-Form Registration Rights  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Pursuant to our registration rights agreement, specified holders of our registrable securities are also entitled to additional short-form
registration rights. Commencing on the date that we become eligible to register securities on Form&nbsp;S-3, each holder of at least 5% of our registrable securities who is a party to
the registration rights agreement may request registration of their shares if the anticipated </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>96</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>aggregate
offering amount of the shares exceeds $1.0&nbsp;million. There is no limit to the number of requests for registrations on Form&nbsp;S-3. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Indemnification  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In connection with all registrations pursuant to the registration rights agreement, we have agreed to indemnify all holders of registrable securities
against specified liabilities, including liabilities under the Securities Act. All stockholders requesting or joining in a registration may be required to agree to indemnify us against certain
liabilities, but in no event will any single stockholder's liabilities exceed the net proceeds to that stockholder from the sale of the registrable securities. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Termination  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The registration rights agreement will terminate upon the earlier of our voluntary liquidation or the sale of all or substantially all of our assets
or outstanding common stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Letters of Credit  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On January&nbsp;25, 2008, WestView, of which Carlo von Schroeter, our director, is managing partner, and John&nbsp;H. Turner, our director, is
general partner, AIG&nbsp;Global Asset Management Holdings Corp., a predecessor entity to PineBridge Global Investments LLC, of which Scott Gallin, our director, is managing director, Beth Angelo,
our Chief Merchandising Officer, Executive Vice President, President of Direct Sales and a director, Jerrold Rosenbaum, a director and a founder, Laurie Bauguss, a consultant and the daughter of
Mr.&nbsp;Rosenbaum, and Curtis Hill, our former President and Chief Executive Officer, issued letters of credit in the following approximate amounts to the administrative agent of our senior credit
facility to secure the guaranty of any borrowings under our revolving credit facility, certain interest on our term loan A facility and term loan B facility and certain other fees:
$2.0&nbsp;million, $2.0&nbsp;million, $380,000, $1.040&nbsp;million, $380,000 and $200,000, respectively. In exchange for the letters of credit, we approved the conditional authorization and
issuance of up to 61,000 shares of Series&nbsp;D preferred stock in the event that a draw is made on these letters of credit. The guarantees and the letters of credit have been terminated. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Demand Promissory Notes  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On January&nbsp;23, 2008, our board of directors authorized us to borrow an aggregate of $1.0&nbsp;million at an interest rate of LIBOR plus a
margin of 1.5% per annum from WestView, of which Carlo von Schroeter, our director, is managing partner, and John&nbsp;H. Turner, our director, is general partner, AIG&nbsp;Global Asset Management
Holdings Corp., a predecessor entity to PineBridge Global Investments&nbsp;LLC, of which Scott Gallin, our director, is managing director, and Katmandu Investment Company,&nbsp;LLC, of which
Jerrold Rosenbaum, our director and a founder, is the president, with each entity funding approximately $333,333. We repaid aggregate interest of 4.81% on the notes and the principal amount in full on
January&nbsp;28, 2008 with borrowings under our senior credit facility. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Arrangements with Jerrold Rosenbaum  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Lease Agreement  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We lease our executive office, warehouse and distribution center from Powers Avenue Joint Venture, a Florida partnership, of which Jerrold Rosenbaum,
one of our directors and a founder, owns approximately 87.3%, Beth Angelo owns 4.7%, Laurie Bauguss owns 4.7% and Curtis Hill, our former President and Chief Executive Officer, owns 3.3%. The lease
commenced on October&nbsp;1, 2006 at an initial rental rate of $408,000 per year. The initial term of the lease expires on October&nbsp;1, 2016. We have the option to extend the term of the lease
for two consecutive periods of two years each. The rental rates for fiscal years 2007, 2008 and 2009 per month were $37,144, $37,144 and $38,964, </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>97</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>respectively.
As of January&nbsp;2, 2010, we have an estimated $5.7&nbsp;million commitment related to this lease, including the optional extension periods. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Employment Agreement and Part-Time Arrangement  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On October&nbsp;1, 2006, Mr.&nbsp;Rosenbaum entered into an employment agreement with us to serve as Vice Chairman of our board of directors at a
base salary of $860,000 a year. His employment agreement terminated effective April&nbsp;9, 2007 and as a result he received his full base salary for the remainder of the first year of his agreement
and $500,000 per year thereafter, plus benefits. He also received certain additional benefits aggregating approximately $34,885, $17,376 and $15,880 for fiscal year 2007, fiscal year 2008 and fiscal
year 2009, respectively. In January 2008, this was reduced to $250,000 per year, which payments stopped in October&nbsp;2009. From October 2009 through the completion of our initial public offering,
Mr.&nbsp;Rosenbaum received $50,000 per year for his part-time work assessing and reviewing potential store locations in addition to $1,000 per day for each real-estate site visit. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>After
the completion of our initial public offering, we began paying Mr.&nbsp;Rosenbaum $25,000 a year for his part-time services. We also agreed to pay Mr.&nbsp;Rosenbaum a fee of
$1,000 per day for his visits to potential store locations where he reviews and assesses the suitability of the location. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Arrangements with Britt Bauguss and Laurie Bauguss  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Laurie Bauguss, a consultant, is the daughter of Jerrold Rosenbaum, a director, and the sister of Beth Angelo, our Chief Merchandising Officer,
Executive Vice President, President of Direct Sales and director. On October&nbsp;1, 2006, Ms.&nbsp;Bauguss entered into an employment agreement, which terminated on November&nbsp;2007 under
which she earned approximately $211,250 for 2007, plus certain additional benefits aggregating $23,058. She worked as a non-contracted employee for fiscal year 2008 and earned $219,500, plus certain
additional benefits aggregating approximately $12,922. In fiscal year 2009, she worked part of the year as a non-contracted employee and later as a consultant and earned $87,260 in the aggregate, plus
certain additional benefits aggregating approximately $1,122. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Britt
Bauguss, Director of Construction, is the son-in-law of Jerrold Rosenbaum, a director, and the brother-in-law of Beth Angelo, our Chief
Merchandising Officer, Executive Vice President, President of Direct Sales and director. On October&nbsp;1, 2006, Britt Bauguss entered into an employment agreement, which agreement was amended on
May&nbsp;5, 2008 to extend the term until the date Mr.&nbsp;Bauguss' separation of employment with us for any reason (thereby making him an employee at will) and to provide for a base salary of
$104,000. Under the agreement, Mr.&nbsp;Bauguss earned approximately $265,380 for 2007, $167,519 for 2008 and $144,308 for 2009, plus certain additional benefits aggregating approximately $24,528,
$25,746 and $25,537 for fiscal year 2007, fiscal year 2008 and fiscal year 2009, respectively. Mr.&nbsp;Bauguss received a payment upon completion of our initial public offering under our success
bonus plan and we awarded him an option grant in the amount of 7,500&nbsp;shares at an exercise price equal to the initial public offering price. This award vests over four years and the term of the
option is 10&nbsp;years. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Indemnification of Officers and Directors  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our certificate of incorporation and by-laws provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware
law. We have purchased directors' and officers' liability insurance that insures against the costs of defense, settlement or payment of a judgment under certain circumstances. In addition, our
certificate of incorporation provides that our directors will not be liable for monetary damages for breach of fiduciary duty. </FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
also entered into indemnification agreements with each of our executive officers and directors. The indemnification agreements provide the executive officers and directors with contractual rights
to indemnification, expense advancement and reimbursement, to the fullest extent permitted under Delaware law. Additionally, we may enter into indemnification agreements with any new directors or
certain of our executive officers that may be broader in scope than the specific indemnification provisions contained in Delaware law. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>There
is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may
result in claims for indemnification by any director or officer. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Policies and Procedures for Related Person Transactions  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our board of directors has adopted a written policy for the review of any transaction, arrangement or relationship in which we are a participant, the
amount involved exceeds $100,000 and one of our executive officers, directors, director nominees or 5% stockholders (or their immediate family members), each of whom we refer to as a "related person,"
has a direct or indirect material interest. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a "related person transaction," the related person must report the proposed related
person transaction to the chairperson of our nominating and corporate governance committee. Additionally, in the case of 5% stockholders, we will solicit this information via an annual questionnaire.
The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by the nominating and corporate governance committee. Whenever practicable, the
reporting, review and approval will occur prior to entering into the transaction. If advance review and approval is not practicable, the nominating and corporate governance committee will review and,
in its discretion, may ratify the related person transaction. Any related person transactions that are ongoing in nature will be reviewed annually and the nominating and corporate governance committee
may establish guidelines for our management to follow its ongoing dealings with the related person. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the nominating and corporate governance committee after full disclosure of the
related person's interest in the transaction. The written policy also provides for the standing pre-approval of certain related person transactions, such as the employment compensation of
executive officers, director compensation and certain charitable contributions, among other things. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>99</FONT></P>

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<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  PRINCIPAL AND SELLING STOCKHOLDERS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table sets forth information as of January&nbsp;21, 2011, regarding the beneficial ownership of our common stock
by: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>each person who we know to beneficially own more than 5% of our common stock;  </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT
COLOR="#3B5A6F" SIZE=2>each of our directors;  </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>each of our named executive officers;  </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F"
SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>all of our directors and executive officers as a group; and
 </FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>each of the selling stockholders. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
have determined beneficial ownership in the table in accordance with SEC rules. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have
deemed shares of our common stock subject to options held by that person that are currently exercisable or will become exercisable within 60&nbsp;days of January&nbsp;21, 2011 to be outstanding,
but we have not deemed these shares to be outstanding for computing the percentage ownership of any other person. The percentage of ownership indicated is based on 15,405,677&nbsp;shares of common
stock outstanding as of January&nbsp;21, 2011. To our knowledge, except as set forth in the footnotes below, each stockholder identified in the table possesses sole voting and investment power with
respect to all shares of our common stock shown as beneficially owned by that stockholder. Unless otherwise indicated, the address for each beneficial owner is c/o Body Central Corp.,
6225&nbsp;Powers Avenue, Jacksonville, FL 32217. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="47pt" style="font-family:times;"></TD>
<TD WIDTH="16pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="34pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="47pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="34pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="47pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="34pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Shares Beneficially<BR>
Owned Prior<BR>
to this Offering </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Shares to be<BR>
Sold in this<BR>
Offering<BR>
Assuming No<BR>
Exercise of<BR>
Over-allotment<BR>
Option </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Shares to be<BR>
Sold in this<BR>
Offering<BR>
Assuming Full<BR>
Exercise of<BR>
Over-allotment<BR>
Option </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Shares Beneficially<BR>
Owned After<BR>
this Offering<BR>
Assuming No<BR>
Exercise of<BR>
Over-allotment<BR>
Option </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Shares Beneficially<BR>
Owned After<BR>
this Offering<BR>
Assuming Full<BR>
Exercise of<BR>
Over-allotment<BR>
Option </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:132pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Name and Address of Beneficial Owner

<!-- COMMAND=ADD_SCROPPEDRULE,132pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Percent </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Percent </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Percent </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>5% Stockholders:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>WestView Capital Partners,&nbsp;L.P.&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,047,842</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,515,682</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,721,407</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,532,160</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,326,435</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Entities advised by PineBridge Investments</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,881,630</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>18.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,433,026</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,627,531</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,448,604</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,254,099</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>Executive Officers and Directors:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Beth R. Angelo</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>711,487</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>327,194</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>391,585</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>384,293</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>319,902</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Martin P. Doolan</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>40,637</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,208</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>22,951</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,429</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17,686</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Scott M. Gallin</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,881,630</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>18.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,433,026</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,627,531</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,448,604</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,254,099</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>John K. Haley</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Jerrold S. Rosenbaum</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,673,489</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>10.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>832,222</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>945,181</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>841,267</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>728,308</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Carlo A. von Schroeter</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,047,842</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,515,682</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,721,407</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,532,160</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,326,435</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>John H. Turner</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,047,842</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,515,682</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,721,407</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,532,160</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>9.9</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,326,435</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>8.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Richard L. Walters</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>160,810</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>18,820</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>37,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>141,990</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>123,170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>B. Allen Weinstein</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>146,711</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>39,123</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>78,245</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>107,588</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>68,466</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1><B>All executive officers and directors as a group (9&nbsp;persons) </B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>8,662,606</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>56.2</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4,186,275</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4,824,540</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>4,476,331</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>29.0</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>%</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>3,838,066</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>24.9</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><B>%</B></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1><B> Other Selling Stockholders:</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Laurie I. Bauguss</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>611,457</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>4.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>304,076</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>345,349</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>307,381</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>266,108</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.7</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Julia B. Davis</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,533</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,353</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>6,706</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>30,180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,827</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Donna George</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>28,580</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,811</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,621</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>24,769</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,959</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Ursula Gregoris</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>28,580</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,811</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,621</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>24,769</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,959</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Curtis V. Hill</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>321,831</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(5)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>160,045</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>181,768</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>161,786</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>140,063</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>John Hill</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,675</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>3,557</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>7,113</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>23,118</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>19,562</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>George Kolber</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>406,377</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(6)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>202,090</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>229,519</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>204,287</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>176,858</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Harriette Terbell</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>60,957</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(7)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>30,315</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>34,429</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>30,642</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,528</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Lina Vainosky</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,005</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>2,667</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>5,334</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>17,338</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>14,671</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#3B5A6F" SIZE="1.0PT" WIDTH="39%" ALIGN="LEFT" -->
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Represents
beneficial ownership of less than one percent (1%) of our outstanding common stock.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Carlo
von Schroeter, our director, is a managing partner and John Turner, our director, is a general partner of WestView and may be deemed to
beneficially own the shares of common stock held by it. Both Messrs.&nbsp;von Schroeter and Turner disclaim </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>100</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=108,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=999325,FOLIO='100',FILE='DISK135:[11ZAK1.11ZAK78401]EI78401A.;31',USER='LPALLES',CD='27-JAN-2011;12:54' -->
<A NAME="page_ei78401_1_101"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:times;"></FONT><FONT COLOR="#3B5A6F" SIZE=1>
such beneficial ownership. The address for Messrs.&nbsp;von Schroeter and Turner and WestView is 125 High Street, 26th&nbsp;floor, Boston MA 02110.  </FONT></P>

<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Consists
of 2,881,630 shares of our common stock held as follows: </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>48,027 by PineBridge PEP III Direct,&nbsp;L.P.;  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>384,218 by PineBridge PEP IV Co-Investment,&nbsp;L.P.;  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>1,949,903 by PineBridge Vantage Partners,&nbsp;L.P.;  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>115,265 by American International Group,&nbsp;Inc. Retirement Plan; and </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>384,217 by APEN Bermuda&nbsp;Ltd.
<BR><BR></FONT></DD></DL>
</UL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><BR></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>PineBridge
PEP III Direct,&nbsp;L.P., PineBridge PEP IV Co-Investment,&nbsp;L.P., PineBridge Vantage Partners,&nbsp;L.P.,
American International Group,&nbsp;Inc. Retirement Plan and APEN Bermuda&nbsp;Ltd. are advised by PineBridge Investments. PineBridge Investments has sole voting power and sole investment power
over the shares and is the beneficial owner of shares held by these entities, with the exception of APEN Bermuda&nbsp;Ltd. for which it disclaims beneficial ownership. Scott Gallin, our director, is
a managing director of PineBridge Investments and may be deemed to beneficially own the shares of common stock held by these entities. Mr.&nbsp;Gallin disclaims such beneficial ownership. The
address for Mr.&nbsp;Gallin and PineBridge Investments is 399&nbsp;Park Avenue, 4<SUP>th</SUP> Floor, New York, NY 10022.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Includes
the following number of shares of common stock which a director, executive officer or selling stockholder has the right to acquire
upon the exercise of stock options that were exercisable as of January&nbsp;21, 2011, or that will become exercisable within 60&nbsp;days after that date: </FONT></DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:50%;margin-left:25%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=1>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="84pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:21pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Name

<!-- COMMAND=ADD_SCROPPEDRULE,21pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Number of Shares </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>B. Allen Weinstein</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>146,711</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Richard L. Walters</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>160,810</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Beth R. Angelo</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>100,030</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Julia B. Davis</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>33,533</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Donna George</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>28,580</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Ursula Gregoris</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>28,580</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>John Hill</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>26,675</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:8pt;text-indent:-8pt;"><FONT COLOR="#3B5A6F" SIZE=1> </FONT><FONT COLOR="#3B5A6F" SIZE=1>Lina Vainosky</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>20,005</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><BR></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>For
purposes of computing the percentage of outstanding shares of common stock held by each person named above, we have given effect to their
options, each as noted above, and as if they were fully exercised.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(4)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Consists
of common stock held by the Doolan Family First Limited Partnership. Martin Doolan, our director, is managing general partner of the
Doolan Family First Limited Partnership and is deemed to beneficially own the shares of common stock held by it. Mr.&nbsp;Doolan disclaims such beneficial ownership.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(5)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Consists
of 321,831 shares beneficially owned by Curtis Hill, our former Chief Executive Officer and President, held as
follows: </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>60,956 shares of our common stock held by Curtis and Susan Hill, as trustees for Jennifer Lada, their daughter, which
beneficial ownership Mr.&nbsp;Hill disclaims;  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>60,956 shares of our common stock held by Curtis and Susan Hill, as trustees for Curtis Hill, Jr., their son, which
beneficial ownership Mr.&nbsp;Hill disclaims; and  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>199,919 shares of our common stock held directly by Curtis Hill.
<BR><BR></FONT></DD></DL>
</UL>
</DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(6)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Consists
of 406,377 shares beneficially owned by George Kolber held as follows: </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>76,166 shares of our common stock held by GVK,&nbsp;L.P., an entity controlled by Mr.&nbsp;Kolber. Mr.&nbsp;Kolber
has sole voting power and sole investment power over the shares held by this entity;  </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>76,167 shares of our common stock held by George Kolber; and </FONT> <FONT COLOR="#3B5A6F" SIZE=1>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>254,044 shares of our common stock held by RKLH,&nbsp;L.P., an entity controlled by Mr.&nbsp;Kolber. Mr.&nbsp;Kolber
has sole voting power and sole investment power over the shares held by this entity. </FONT></DD></DL>
</UL>
</DD></DL>
<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The address for Mr.&nbsp;Kolber, GVK,&nbsp;L.P. and RKLH,&nbsp;L.P. is 884 Navesink River Road, Locust, NJ 07760. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(7)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
address for Ms.&nbsp;Terbell is 401&nbsp;Green Farms Road, Westport,&nbsp;CT&nbsp;06880. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>101</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ek78401_description_of_capital_stock"> </A>
<A NAME="toc_ek78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  DESCRIPTION OF CAPITAL STOCK    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Introductory Note  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following description of our capital stock and provisions of our certificate of incorporation and by-laws are summaries only, and they are
qualified by reference to the certificate of incorporation and the by-laws which we included as Exhibits to our registration statement of which this prospectus is a part. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Authorized Capitalization  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our authorized capital stock consists of 150,000,000&nbsp;shares of common stock, par value $0.001 per share, and 5,000,000 shares of undesignated
preferred stock, par value $0.001 per share. As of January&nbsp;21, 2011, 15,405,677&nbsp;shares of common stock were outstanding and no shares of preferred stock were outstanding. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Common Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Voting Rights  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of stockholders. An election of directors
by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. There are no cumulative voting rights for the election of directors,
which means that the holders of a majority of the shares of our common stock voted will be entitled to elect all of our directors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Dividends  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Holders of our common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, and subject to any
preferential dividend rights of any then outstanding shares of preferred stock. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Liquidation  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the event of our liquidation, dissolution or winding up, holders of our common stock would be entitled to receive proportionately all assets
available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding
shares of preferred stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Rights and Preferences  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Holders of our common stock have no preemptive, subscription, conversion or other rights, and there are no redemption or sinking fund provisions
applicable to our common stock. The rights, preferences and privileges of holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of any series
of our preferred stock that we may designate and issue in the future. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Preferred Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Under the terms of our certificate of incorporation, our board of directors has the authority, without further action by our stockholders, to issue
up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including voting rights, dividend rights, conversion rights,
redemption privileges and liquidation preferences. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>102</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The
issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could make it more difficult for a third party to
acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. We
currently have no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Registration Rights  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Pursuant to the registration rights agreement entered into with a certain number of our existing stockholders at the time of the 2006 Transaction,
certain holders of our common stock issued upon conversion of our Series&nbsp;A preferred stock have the right to require us to register any or all of their shares under the Securities Act at our
expense, subject to certain limitations. See "Certain Relationships and Related Party Transactions&#151;Registration Rights Agreement" for more information. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Anti-Takeover Provisions  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Certificate of Incorporation and By-laws  </I></B></FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Classified Board  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our certificate of incorporation provides for our board of directors to be divided into three classes, with staggered three-year terms.
Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because
our stockholders do not have cumulative voting rights, our stockholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors. </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Stockholder Action by Written Consent  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Pursuant to Section&nbsp;228 of the Delaware General Corporation Law, any action required to be taken at any annual or special meeting of the
stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and
voted, unless the company's certificate of incorporation provides otherwise. Our certificate of incorporation and by-laws provide that all stockholder action must be effected at a duly called meeting
of stockholders and not by written consent, and that only our board of directors, chairman of our board of directors, chief executive officer or president (in the absence of a chief executive officer)
may call a special meeting of stockholders. </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Advance Notice  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In addition, our by-laws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders,
including proposed nominations of candidates for election to our board of directors. Stockholders at an annual meeting will only be able to consider proposals or nominations specified in the notice of
meeting or brought before the meeting by or at the direction of our board of directors, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who
has delivered timely written notice in proper form to our secretary of the stockholder's intention to bring such business before the meeting. These provisions could have the effect of delaying
stockholder actions until the next stockholder meeting that are favored by the holders of a majority of our outstanding voting securities. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>103</FONT></P>

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<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Undesignated Preferred Stock  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue preferred stock with super voting,
special approval, dividend or
other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us. These and other provisions may have the effect of deferring, delaying or discouraging
hostile takeovers or changes in control of us. </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> Super-Majority Voting  </I></FONT></P>

</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our certificate of incorporation requires a 67% stockholder vote for the amendment, repeal or modification of certain provisions of our certificate
of incorporation and by-laws relating to the classification of our board of directors, the requirement that stockholder actions be effected at a duly called meeting, and the designated parties
entitled to call a special meeting of the stockholders. The combination of the classification of our board of directors, the lack of cumulative voting and the 67% stockholder voting requirements will
make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board of
directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In
addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the
success of any attempt to change control of our company. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>These
above provisions may have the effect of deterring hostile takeovers, delaying, or preventing changes in control of our management or our company, such as a merger, reorganization or tender
offer. These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage certain types of transactions that
may involve an actual or threatened acquisition of us. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage
certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may
inhibit fluctuations in the market price of our shares that could result from actual or rumored takeover attempts. Such provisions may also have the effect of preventing changes in our management. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Section&nbsp;203 of the Delaware General Corporation Law  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are subject to Section&nbsp;203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>before such date, our board of directors approved either the business combination or the transaction that resulted in the
stockholder becoming an interested holder;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the
outstanding voting stock owned by the interested stockholder) those shares owned (i)&nbsp;by persons who are directors and also officers and (ii)&nbsp;employee stock plans in which employee
participants do not have the right </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>104</FONT></P>

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<UL>
<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>to
determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>on or after such date, the business combination is approved by our board of directors and authorized at an annual or
special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66<SUP>2</SUP>/<SMALL>3</SMALL>% of the outstanding voting stock that is not owned by the interested
stockholder. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
general, Section&nbsp;203 defines business combination to include the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>any merger or consolidation involving the corporation and the interested stockholder;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested
stockholder;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of
the corporation to the interested stockholder;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any
class or series of the corporation beneficially owned by the interested stockholder; or </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial
benefits by or through the corporation. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
general, Section&nbsp;203 defines an "interested stockholder" as an entity or person who, together with the person's affiliates and associates, beneficially owns, or within three years prior to
the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Limitations of Liability and Indemnification Matters  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As discussed above under the section "Executive Compensation&#151;Limitation of Liability and Indemnification of Officers and Directors,"
Delaware law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties
as directors. Our certificate of incorporation includes a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director, except for
liability: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>for breach of duty of loyalty;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law; </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>under Section&nbsp;174 of the Delaware General Corporation Law (unlawful dividends or stock repurchases);
or </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>for transactions from which the director derived improper personal benefit. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
by-laws provide that we must indemnify and advance expenses to our directors and officers to the fullest extent authorized by Delaware law. We are also expressly authorized to, and do, carry
directors' </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>105</FONT></P>

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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>and
officers' insurance for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain
qualified directors and executive officers. If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our
directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
limitation of liability and indemnification provisions in our certificate of incorporation and by-laws may discourage stockholders from bringing a lawsuit against directors for breach of their
fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise
benefit us and our stockholders. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification provisions. There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which
indemnification is sought. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
addition to the indemnification required in our certificate of incorporation and by-laws, we have entered into indemnification agreements with each of our current directors and officers, the form
of which we included as an Exhibit to our registration statement of which this prospectus is a part. These agreements provide for the indemnification of our directors and officers for all reasonable
expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We believe that these bylaw provisions and
indemnification agreements, as well as our maintaining directors' and officers' liability insurance, help to attract and retain qualified persons as directors and officers. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
stockholder's investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as
indemnification for liabilities arising under the Securities Act may be permitted to our directors,
officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in
the Securities Act, and is, therefore, unenforceable. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Transfer Agent and Registrar  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The transfer agent and registrar for our common stock is American Stock Transfer&nbsp;&amp; Trust Company,&nbsp;LLC. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> The Nasdaq Global Market  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our common stock is listed on The Nasdaq Global Market under the symbol BODY. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>106</FONT></P>

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<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  DESCRIPTION OF CERTAIN INDEBTEDNESS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On October&nbsp;20, 2010, we repaid all amounts owing under our term loan facilities of our senior credit facility described below using proceeds
from our initial public offering and terminated the facility. There were no amounts outstanding under the revolving credit facility of our senior credit facility at the time of repayment. We are
currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011. There is no guarantee that such a facility will be entered
into on commercially reasonable terms or at all. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>107</FONT></P>

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NAME="eo78401_shares_eligible_for_future_sale"> </A>
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<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  SHARES ELIGIBLE FOR FUTURE SALE    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Prior to our initial public offering on October&nbsp;14, 2010, there was no public market for our common stock. Future sales of our common stock in
the public market could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares will be available for sale shortly after this offering due to
contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely
affect the prevailing market price at such time and our ability to raise equity capital in the future. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Sale of Restricted Shares  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Upon completion of this offering, we will have 15,505,677 shares of common stock outstanding. Of these shares of common stock, the 5,000,000 (or
5,750,000&nbsp;shares if the underwriters' over-allotment is exercised in full) shares of common stock being sold in this offering will be freely tradable without restriction under the Securities
Act, except for any such shares which
may be held or acquired by an "affiliate" of ours, as that term is defined in Rule&nbsp;144 promulgated under the Securities Act, which shares will be subject to the volume limitations and other
restrictions of Rule&nbsp;144 described below. The remaining 4,319,393 shares of common stock held by certain of the selling stockholders upon completion of this offering will be "restricted
securities," as that phrase is defined in Rule&nbsp;144, and may be resold only after registration under the Securities Act or pursuant to an exemption from such registration, including, among
others, the exemptions provided by Rules&nbsp;144 and 701 under the Securities Act, which rules are summarized below. These remaining shares of common stock held by the selling stockholders upon
completion of this offering will be available for sale in the public market after the expiration of the lock-up agreements described in "Underwriting," taking into account the provisions
of Rules&nbsp;144 and 701 under the Securities Act. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Rule&nbsp;144  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In general, under Rule&nbsp;144 under the Securities Act, as in effect on the date of this prospectus, a person who is one of our affiliates and
has beneficially owned shares of our common stock for at least six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater
of: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>one percent of the number of shares of common stock then outstanding, which will equal approximately 155,056 shares
immediately after the completion of this offering; and </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the average weekly trading volume of our common stock on The Nasdaq Global Market during the four calendar weeks preceding
the filing of a notice on Form&nbsp;144 with respect to the sale. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Sales
under Rule&nbsp;144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us. For a person who has not been deemed
to have been one of our affiliates at any time during the 90&nbsp;days preceding a sale, sales of our securities held longer than six months, but less than one year, will be subject only to the
current public information requirement. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
person who is not deemed to have been one of our affiliates at any time during the 90&nbsp;days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least one
year, including the holding period of any prior owner other than an affiliate, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice
provisions </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>108</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>of
Rule&nbsp;144. All shares of our common stock will qualify for resale under Rule&nbsp;144 within 180&nbsp;days of the date of this prospectus, subject to the lock-up agreements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Rule&nbsp;701  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Rule&nbsp;701 under the Securities Act, as in effect on the date of this prospectus, permits resales of shares in reliance upon Rule&nbsp;144 but
without compliance with certain restrictions of Rule&nbsp;144, including the holding period requirement. Most of our employees, executive officers or directors who purchased shares under a written
compensatory plan or contract may be entitled to rely on the resale provisions of Rule&nbsp;701. However, substantially all Rule&nbsp;701 shares are subject to lock-up agreements as
described below and under "Underwriting" included elsewhere in this prospectus and will become eligible for sale upon the expiration of the restrictions set forth in those agreements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Lock-up Agreements  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We and each of our executive officers and directors as well as all of the selling stockholders have agreed with the underwriters, that for a period
of 90&nbsp;days after the date of this prospectus, we or they will not offer, sell, assign, transfer, pledge, contract to sell or otherwise dispose of or hedge any shares of our common stock or any
securities convertible into or exchangeable for shares of common stock, subject to specified exceptions. The representatives of the underwriters may, in their discretion, at any time without prior
notice, release all or any portion of the shares from the restrictions in any such agreement. See "Underwriting" for more information. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Registration Rights  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We are party to a registration rights agreement which provides that holders of our common stock issued upon conversion of our Series&nbsp;A
preferred stock have the right to require us to register any or all of their shares under the Securities Act at our expense, subject to certain limitations. Registration of shares held by these
stockholders under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon effectiveness of the registration, subject to
the expiration of the lock-up period. See "Certain Relationships and Related Party Transactions&#151;Registration Rights Agreement" for more information. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Equity Plans  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On January&nbsp;4, 2011, we filed a Form&nbsp;S-8 registration statement under the Securities Act to register shares of our common
stock subject to options outstanding or reserved for issuance under our Plan. Such registration statement became effective immediately upon filing, and shares covered by the Form&nbsp;S-8
registration statement are eligible for sale in the public markets, subject to compliance with Rule&nbsp;144 limitations applicable to affiliates and any lock-up agreements. For a more
complete discussion of our stock plans, see "Executive Compensation&#151;Compensation Discussion and Analysis&#151;Equity-Based Compensation." </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>109</FONT></P>

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NAME="eo78401_certain_material_u.s._federal___cer02773"> </A>
<A NAME="toc_eo78401_2"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following is a summary of certain material U.S. federal income tax consequences of the purchase, ownership and disposition of our common stock to
a non-U.S. holder that purchases shares of our common stock in this offering. For purposes of this summary, a "non-U.S. holder" means a beneficial owner of our common stock
that is, for U.S. federal income tax purposes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>a nonresident alien individual;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>a foreign corporation (or entity treated as a foreign corporation for U.S. federal income tax purposes); or </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>a foreign estate or foreign trust. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
the case of a holder that is classified as a partnership for U.S. federal income tax purposes, the tax treatment of a partner in such partnership generally will depend upon the status of the
partner and the activities of the partner and the partnership. If you are a partner in a partnership holding our common stock, then you should consult your own tax advisor. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This
summary is based upon the provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, the Treasury regulations promulgated thereunder and judicial and
published administrative interpretations thereof, all as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different
from those summarized below. We cannot assure you that a change in law, possibly with retroactive application, will not alter significantly the tax considerations that we describe in this summary. We
have not sought, and do not plan to seek, any ruling from the U.S. Internal Revenue Service, which we refer to as the IRS, with respect to statements made and the conclusions reached in the following
summary, and there can be no assurance that the IRS or a court will agree with our statements and conclusions. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This
summary does not address all aspects of U.S. federal income taxes that may be relevant to non-U.S. holders in light of their personal circumstances, and does not deal with federal
taxes other than the U.S. federal income tax or with non-U.S., state or local tax considerations. Special rules, not discussed here, may apply to certain non-U.S. holders,
including: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>U.S. expatriates and former long-term residents of the U.S.;  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>controlled foreign corporations (and their stockholders);  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>passive foreign investment companies (and their stockholders); and  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>investors in pass-through entities that are subject to special treatment under the Code. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Such
non-U.S. holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This
summary applies only to a non-U.S. holder that holds our common stock as a capital asset (generally, property held for investment). Non-U.S. holders that hold our stock
other than as capital assets should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>110</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
you are considering the purchase of our common stock, you should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and
disposition of our common stock, as well as the consequences to you arising under U.S. tax laws other than the federal income tax law or under the laws of any other taxing jurisdiction. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Dividends  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If we make a distribution of cash or property (other than certain stock distributions) with respect to our common stock (or certain redemptions that
are treated as distributions with respect to common stock), any such distributions will be treated as a dividend for U.S. federal income tax purposes to the extent paid from our current or accumulated
earnings and
profits (as determined under U.S. federal income tax principles). Dividends paid to you generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by you within the U.S. and, where a tax treaty applies, that are
generally attributable to a permanent establishment or fixed base in the U.S., as defined under the applicable treaty, are not subject to the withholding tax, but instead are subject to U.S. federal
income tax on a net income basis at applicable graduated individual or corporate rates. Certain certification and disclosure requirements, including delivery of a properly executed IRS
Form&nbsp;W-8ECI, must be satisfied for that effectively connected income to be exempt from withholding. Any such effectively connected dividends received by a foreign corporation may be
subject to an additional "branch profits tax" at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
the amount of a distribution paid on our common stock exceeds our current and accumulated earnings and profits, such excess will be allocated ratably among each share of common stock with respect
to which the distribution is paid and treated first as a tax-free return of capital to the extent of your adjusted tax basis in each such share, and thereafter as capital gain from a sale
or other disposition of such share of common stock that is taxed to you as described below under the heading "Gain on Disposition of Common Stock." Your adjusted tax basis is generally the purchase
price of the shares, reduced by the amount of any such tax-free returns of capital. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
you wish to claim the benefit of an applicable treaty rate to avoid or reduce withholding of U.S. federal income tax for dividends, then you must (a)&nbsp;provide the withholding agent with a
properly completed IRS Form&nbsp;W-8BEN (or other applicable form) and certify under penalties of perjury that you are not a U.S. person and are eligible for treaty benefits, or
(b)&nbsp;if our common stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other
requirements apply to certain non-U.S. holders that act as intermediaries (including partnerships). </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
you are eligible for a reduced rate of U.S. federal income tax pursuant to an income tax treaty, then you may obtain a refund or credit of any excess amounts withheld by timely filing an
appropriate claim with the IRS. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Gain on Disposition of Common Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>You generally will not be subject to U.S. federal income tax with respect to gain realized on the sale, exchange or other taxable disposition of our
common stock, unless: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>the gain is effectively connected with a trade or business you conduct in the U.S., and, in cases in which certain tax
treaties apply, is attributable to a permanent establishment or fixed base in the U.S. as defined under the applicable treaty; </FONT></DD></DL>
</UL>
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<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>if you are an individual, you are present in the U.S. for 183&nbsp;days or more in the taxable year of the sale,
exchange or other taxable disposition, and certain other conditions are met; or  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>we are or have been during a specified testing period a "United States real property holding corporation" for U.S. federal
income tax purposes, and, in the case where shares of our common stock are regularly traded on an established securities market, you have owned, directly or indirectly, more than 5% of our common
stock at any time within the shorter of the five-year period preceding the disposition or your holding period for your shares of our common stock. There can be no assurance that our common
stock will be treated as regularly traded on an established securities market for this purpose. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If
your gain is described in the first or third bullet point above, you will be subject to tax on the net gain derived from the sale under regular graduated United States federal income tax rates or
such lower rate as may be specified by an applicable income tax treaty. If you are a foreign corporation and your gain is described in the first bullet point above, you may also be subject to a branch
profits tax at a rate of 30% or at such lower rate as may be specified by an applicable income tax treaty. If you are an individual described in the second bullet point above, you will be subject to a
flat 30% tax on the gain derived from the sale, which may be offset by U.S. source capital losses. The gross proceeds from transactions that generate gains described in the third bullet point above
will generally be subject to a 10% withholding tax, which you may claim as a credit against your federal income tax liability. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
believe that we have not been and are not, and we do not anticipate becoming, a "United States real property holding corporation" for U.S. federal income tax purposes. Generally, we will be a
"United States real property holding corporation" if the fair market value of our U.S. real property interests equals or exceeds 50% of the sum of the fair market values of our worldwide real property
interests and other assets used or held for use in a trade or business, all as determined for U.S. federal income tax purposes. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Information Reporting and Backup Withholding  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We must report annually to the IRS and to you the amount of dividends and other distributions paid to you and the amount of tax, if any, withheld
with respect to those distributions. The IRS may make this information available to the tax authorities in the country in which you are resident. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
addition, you may be subject to information reporting requirements and backup withholding (currently at a rate of 28%) with respect to dividends paid on, and the proceeds of disposition of, shares
of our common stock, unless, generally, you certify under penalties of perjury (usually on IRS Form&nbsp;W-8BEN) that you are not a U.S. person or you otherwise establish an exemption.
Additional rules relating to information reporting requirements and backup withholding with respect to payments of the proceeds from the disposition of shares of our common stock are as
follows: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If the proceeds are paid to or through the U.S. office of a broker, the proceeds generally will be subject to backup
withholding and information reporting, unless you certify under penalties of perjury (usually on IRS Form&nbsp;W-8BEN) that you are not a U.S. person or you otherwise establish an
exemption.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If the proceeds are paid to or through a non-U.S. office of a broker that is not a U.S. person and is not a
foreign person with certain specified U.S. connections, which we refer to below as a "U.S.-related person", information reporting and backup withholding generally will not apply. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>112</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>If the proceeds are paid to or through a non-U.S. office of a broker that is a U.S. person or a U.S.-related
person, the proceeds generally will be subject to information reporting (but not to backup withholding), unless you certify under penalties of perjury (usually on IRS Form&nbsp;W-8BEN)
that you are not a U.S. person. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against your U.S. federal income tax liability, provided the
required information is timely furnished by you to the IRS. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Recent Legislation Relating to Foreign Accounts  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Recently enacted legislation will impose withholding taxes on certain types of payments made to "foreign financial institutions" and certain other
non-U.S. entities after December&nbsp;31, 2012 unless those institutions and entities meet additional certification, information reporting and other requirements. The legislation will
generally impose a 30% withholding tax on dividends on, or gross proceeds from the sale or other disposition of, our common stock paid to a foreign financial institution unless the foreign financial
institution enters into an agreement with the U.S. Treasury to, among other things, (i)&nbsp;undertake to identify accounts held by certain U.S. persons (including certain equity and debt holders of
such institutions) or by U.S.-owned foreign entities, (ii)&nbsp;annually report certain information about such accounts, and (iii)&nbsp;withhold 30% on payments to account holders whose actions
prevent it from complying with these reporting and other requirements. In addition, subject to certain exceptions, the legislation will impose a 30% withholding tax on the same types of payments to an
entity that is not a foreign financial institution unless the entity certifies that it does not have any substantial U.S. owners (which generally include any U.S. persons who directly or indirectly
own more than 10% of the entity) or furnishes identifying information regarding each such substantial U.S. owner. We will not pay any additional amounts to non-U.S. holders in respect of any amounts
withheld. Prospective investors should consult their tax advisors regarding this legislation. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>The summary of material U.S. federal income tax consequences for non-U.S. holders provided above is included for general information purposes only. Potential purchasers of our
common stock are urged to consult their own tax advisors to determine the U.S. federal, state, local and non-U.S. tax considerations of purchasing, owning and disposing of our common
stock.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>113</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="eq78401_underwriting"> </A>
<A NAME="toc_eq78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  UNDERWRITING    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We and the selling stockholders have agreed to sell and the underwriters named below have severally agreed to buy, subject to the terms of the
underwriting agreement, the number of shares listed opposite their names below. Piper Jaffray&nbsp;&amp;&nbsp;Co. and Jefferies&nbsp;&amp; Company,&nbsp;Inc. are acting as joint book-running managers
for this offering and as representatives of the underwriters. The underwriters are severally committed to purchase and pay for all of the shares if any are purchased. </FONT></P>
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<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="60pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:58pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Underwriters

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Number<BR>
of Shares </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Piper Jaffray&nbsp;&amp;&nbsp;Co.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Jefferies&nbsp;&amp; Company,&nbsp;Inc.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Robert W. Baird&nbsp;&amp;&nbsp;Co. Incorporated</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>William Blair&nbsp;&amp; Company, L.L.C.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Oppenheimer&nbsp;&amp; Co. Inc.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,000,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The underwriters have advised us and the selling stockholders that they propose to offer the shares of our common stock to the public at $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. The underwriters propose to offer the shares to certain dealers at the same price less a concession of not more than $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. The underwriters may allow and the dealers may
re-allow a concession of not more than $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share on sales to certain other brokers and dealers. After this offering, these figures may be changed by the underwriters. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
selling stockholders have granted to the underwriters an option to purchase up to an additional 750,000 shares of common stock, on a pro rata basis, at the same price to the public, and with the
same underwriting discount, as set forth in the table above. The underwriters may exercise this option any time during the 30-day period after the date of this prospectus, but only to
cover over-allotments, if any. To the extent the underwriters exercise the option, each underwriter will become obligated, subject to certain conditions, to purchase approximately the same
percentage of the additional shares as it was obligated to purchase under the underwriting agreement. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
following table shows the underwriting fees to be paid by us and the selling stockholders to the underwriters in connection with this offering. These amounts are shown assuming both no exercise
and full exercise of the over-allotment option. </FONT></P>
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<TD WIDTH="56pt" style="font-family:times;"></TD>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="134pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="138pt" style="font-family:times;"></TD>
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<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Per Share </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total with No Exercise </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total with Full Exercise </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Paid by us</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> $</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> $</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> $</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Paid by the selling stockholders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> $</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> $</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> $<BR></FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In addition, we estimate that the expenses of this offering payable by us, other than the underwriting discounts and commissions, will be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
common is listed on The Nasdaq Global Market under the symbol BODY. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers' certificates and
legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the shares if any of them are purchased. If an
underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.
We and the selling </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>114</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>stockholders
have agreed to indemnify the underwriters against certain liabilities, including civil liabilities under the Securities Act, or to contribute to payments that the underwriters may be
required to make in respect of those liabilities. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
and each of our directors, executive officers and all of the selling stockholders have agreed to certain restrictions on our ability to sell additional shares of our common stock for a period of
90&nbsp;days after the date of this prospectus. We have agreed not to directly or indirectly (i)&nbsp;offer for sale, sell, contract to sell, grant any option for the sale of, or otherwise issue
or dispose of, any shares of our common stock, options or warrants to acquire shares of our common stock, or any related security or instrument, (ii)&nbsp;otherwise dispose of any shares of our
common stock, options or warrants to acquire common stock, or securities exchangeable or exercisable for or convertible into common shares currently or hereafter owned either of record or beneficially
or (iii)&nbsp;publicly announce an intention to do any of the foregoing, in each case, without the prior written consent of Piper Jaffray &amp; Co. The agreements provide exceptions for (i)&nbsp;sales
to underwriters pursuant to the underwriting agreement, (ii)&nbsp;our sales in connection with the exercise of options granted and the granting of options to purchase shares under our existing stock
option plans and (iii)&nbsp;certain other exceptions. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
connection with our initial public offering, all of our directors, executive officers and all of our stockholders, in each case in effect at the time of our initial public offering, entered into
lock-up agreements substantially similar to the contractual lock-up described above, except that such lock-up agreements expire on April&nbsp;12, 2011, subject to certain extensions if we announce
we will release earnings results. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>To
facilitate this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock during and after this offering. Specifically, the
underwriters may over-allot or otherwise create a short position in our common stock
for their own account by selling more shares of common stock than have been sold to them by us and the selling stockholders. The underwriters may elect to cover any such short position by purchasing
shares of our common stock in the open market or by exercising the over-allotment option granted to the underwriters. In addition, the underwriters may stabilize or maintain the price of
our common stock by bidding for or purchasing shares of common stock in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or
other broker-dealers participating in this offering are reclaimed if shares of our common stock previously distributed in this offering are repurchased, whether in connection with stabilization
transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price of our common stock at a level above that which might otherwise prevail in the open market.
The imposition of a penalty bid may also affect the price of our common stock to the extent that it discourages resales of our common stock. The magnitude or effect of any stabilization or other
transaction is uncertain. These transactions may be effected on The Nasdaq Global Market or otherwise and, if commenced, may be discontinued at any time. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
connection with this offering, some underwriters and selling group members may also engage in passive market making transactions on The Nasdaq Global Market. Passive market making consists of
displaying bids on The Nasdaq Global Market limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule&nbsp;103 of
Regulation&nbsp;M promulgated by the SEC limits the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market
price of our common stock at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>115</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This
prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling group members, if any, participating in this offering and one or
more of the underwriters participating in this offering may distribute prospectuses and prospectus supplements electronically. Any such allocation for online distributions will be made by the
underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters' websites and any information contained in any other website
maintained by any of the underwriters is not part of this prospectus, has not been approved and/or endorsed by us, the selling stockholders or the underwriters and should not be relied upon by
investors. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>From
time to time in the ordinary course of their respective businesses, certain of the underwriters and their affiliates have and may in the future engage in commercial banking or investment banking
transactions with us and our affiliates. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Selling Restrictions  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Sales outside the United States  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>No action has been taken in any jurisdiction (except in the U.S.) that would permit a public offering of shares of our common stock, or the
possession, circulation or distribution of this prospectus supplement, the accompanying prospectus or any other material relating to us or shares of our common stock in any jurisdiction where action
for that purpose is required. Accordingly, shares of our common stock may not be offered or sold, directly or indirectly, and none of this prospectus or any other offering material or advertisements
in connection with shares of our common stock may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country
or jurisdiction. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Each
of the underwriters may arrange to sell shares of our common stock offered hereby in certain jurisdictions outside the U.S., either directly or through affiliates, where they are permitted to do
so. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in European Economic Area  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In relation to each member state of the European Economic Area which has implemented the Prospectus Directive, or a "Relevant Member State," with
effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, no offer of shares of our common stock has been made or will be made to the public in
that Relevant Member State, except that, with effect from and including such date, an offer of shares of our common stock may be made to the public in the Relevant Member State at any
time: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>to
legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>to
any legal entity which has two or more of (i)&nbsp;an average of at least 250 employees during the last financial year; (ii)&nbsp;a total balance
sheet of more than &euro;43,000,000 and (iii)&nbsp;an annual net turnover of more than &euro;50,000,000, as shown in its last annual or consolidated accounts;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(c)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>to
fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(d)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>in
any other circumstances which do not require the publication by us of a prospectus pursuant to Article&nbsp;3 of the Prospectus Directive. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>116</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>For
the purposes of this provision, the expression an "offer of shares of our common stock to the public" in relation to any shares in any Relevant Member State means the communication in any form and
by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase any shares, as the same may be varied in that Relevant
Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in the United Kingdom  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This prospectus and any other material in relation to the shares described herein is only being distributed to, and is only directed at, persons in
the United Kingdom that are qualified investors within the meaning of Article&nbsp;2(1)(e) of the Prospective Directive ("qualified investors") that also (i)&nbsp;have professional experience in
matters relating to investments falling within Article&nbsp;19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the "Order", (ii)&nbsp;who fall
within Article&nbsp;49(2)(a) to (d)&nbsp;of the Order or (iii)&nbsp;to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). The
shares are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such shares will be engaged in only with, relevant persons. This prospectus and its contents are
confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed
by recipients to any other person in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this prospectus or any of its contents. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
distribution of this prospectus in the United Kingdom to anyone not falling within the above categories is not permitted and may contravene the Order. No person falling outside those categories
should treat this prospectus as constituting a promotion to him, or act on it for any purposes whatever. Recipients of this prospectus are advised that we, the underwriters and any other person that
communicates this prospectus are not, as a result solely of communicating this prospectus, acting for or advising them and are not responsible for providing recipients of this prospectus with the
protections which would be given to those who are clients of any aforementioned entities that is subject to the Financial Services Authority Rules. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in Hong Kong  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our common stock may not be offered or sold by means of any document other than: (i)&nbsp;in circumstances which do not constitute an offer to the
public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), (ii)&nbsp;to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571, Laws of Hong
Kong) and any rules thereunder, or (iii)&nbsp;in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance. No advertisement,
invitation or other document relating our common stock may be issued, whether in Hong Kong or elsewhere, where such document is directed at, or the contents are likely to be accessed or read by, the
public of Hong Kong (except if permitted to do so under the laws of Hong Kong), other than with respect to such common stock that is intended to be disposed of only to persons outside of Hong Kong or
only to "professional investors" as defined in the Securities and Futures Ordinance and any rules thereunder. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in Switzerland  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This prospectus, as well as any other material relating to shares of our common stock which are the subject of the offering contemplated by this
prospectus, do not constitute an issue prospectus pursuant to Article&nbsp;652a of the Swiss Code of Obligations. The shares will not be listed on the SWX Swiss Exchange and, therefore, the
documents relating to the shares, including, but not limited to, this prospectus, do not claim to comply with the disclosure standards of the listing rules of SWX Swiss </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>117</FONT></P>

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HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Exchange
and corresponding prospectus schemes annexed to the listing rules of the SWX Swiss Exchange. The shares are being offered in Switzerland by way of a private placement, i.e.&nbsp;to a small
number of selected investors only, without any public offer and only to investors who do not purchase the shares with the intention to distribute them to the public. The investors will be individually
approached by us from time to time. This prospectus, as well as any other material relating to the shares, is personal and confidential and do not constitute an offer to any other person. This
prospectus may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available
to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in the Dubai International Financial Centre  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This prospectus relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This prospectus
is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no
responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this prospectus nor taken steps to verify the
information set out in it, and has no responsibility for it. The shares of our common stock which are the subject of the offering contemplated by this prospectus may be illiquid and/or subject to
restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should
consult an authorized financial adviser. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in Singapore  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document
or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares of our common stock may not be circulated or distributed, nor may the shares be offered or
sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i)&nbsp;to an institutional investor under
Section&nbsp;274 of the Securities and Futures Act, Chapter&nbsp;289 of Singapore (the "SFA"), (ii)&nbsp;to a relevant person, or any person pursuant to Section&nbsp;275 (1A), and in
accordance with the conditions, specified in Section&nbsp;275 of the SFA or (iii)&nbsp;otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Where
the shares are subscribed or purchased under Section&nbsp;275 by a relevant person which is: (a)&nbsp;a corporation (which is not an accredited investor) the sole business of which is to
hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b)&nbsp;a trust (where the trustee is not an accredited
investor) whose sole whole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the
beneficiaries' rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section&nbsp;275 except: (i)&nbsp;to an
institutional investor under Section&nbsp;274 of the SFA or to a relevant person, or any person pursuant to Section&nbsp;275(1A), and in accordance with the conditions, specified in
Section&nbsp;275 of the SFA; (ii)&nbsp;where no consideration is given for the transfer; or (iii)&nbsp;by operation of law. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in France  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The prospectus supplement and the accompanying prospectus (including any amendment, supplement or replacement thereto) have not been prepared in
connection with the offering of our securities that has been approved by the Autorit&eacute; des march&eacute;s financiers or by the competent authority of another State that is a
contracting party to the Agreement on the European Economic Area and notified to the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>118</FONT></P>

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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Autorit&eacute;
des march&eacute;s financiers; no security has been offered or sold and will be offered or sold, directly or indirectly, to the public in France except to permitted
investors, or Permitted Investors, consisting of persons licensed to provide the investment service of portfolio management for the account of third parties, qualified investors (investisseurs
qualifi&eacute;s) acting for their own account and/or corporate investors meeting one of the four criteria provided in article&nbsp;D. 341-1 of the French Code
Mon&eacute;taire et Financier and belonging to a limited circle of investors (cercle restreint d'investisseurs) acting for their own account, with "qualified investors" and "limited circle of
investors" having the meaning ascribed to
them in Article&nbsp;L. 411-2, D. 411-1, D. 411-2, D. 734-1, D. 744-1, D. 754-1 and D. 764-1 of the French Code
Mon&eacute;taire et Financier; none of this prospectus supplement and the accompanying Prospectus or any other materials related to the offer or information contained therein relating to our
securities has been released, issued or distributed to the public in France except to Permitted Investors; and the direct or indirect resale to the public in France of any securities acquired by any
Permitted Investors may be made only as provided by articles&nbsp;L. 411-1, L. 411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of
the French Code Mon&eacute;taire et Financier and applicable regulations thereunder. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in Italy  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The offering of the securities has not been registered pursuant to the Italian securities legislation and, accordingly, we have not offered or sold,
and will not offer or sell, our common stock in the Republic of Italy in a solicitation to the public, and that sales of our common stock in the Republic of Italy shall be effected in accordance with
all Italian securities, tax and exchange control and other applicable laws and regulations. In any case, our common stock cannot be offered or sold to any individuals in the Republic of Italy either
in the primary market or the secondary market. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
will not offer, sell or deliver any securities or distribute copies of this prospectus or any other document relating to our common stock in the Republic of Italy except to "Professional
Investors", as defined in Article&nbsp;31.2 of CONSOB Regulation No.&nbsp;11522 of 2&nbsp;July 1998 as amended, or "Regulation No.&nbsp;11522", pursuant to Article&nbsp;30.2 and 100 of
Legislative Decree No.&nbsp;58 of 24&nbsp;February 1998 as amended, or "Decree No.&nbsp;58", or in any other circumstances where an expressed exemption to comply with the solicitation
restrictions provided by Decree No.&nbsp;58 or Regulation No.&nbsp;11971 of 14&nbsp;May 1999 as amended applies, provided, however, that any such offer, sale or delivery of our common stock or
distribution of copies of this prospectus or any other document relating to our common stock in the Republic of Italy must be: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(a)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>made
by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative
Decree No.&nbsp;385 of 1&nbsp;September 1993 as amended, or "Decree No.&nbsp;385," Decree No.&nbsp;58, CONSOB Regulation No.&nbsp;11522 and any other applicable laws and regulations;
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(b)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>in
compliance with Article&nbsp;129 of Decree No.&nbsp;385 and the implementing instructions of the Bank of Italy, pursuant to which the issue, trading
or placement of securities in Italy is subject to a prior notification to the Bank of Italy, unless an exemption, depending, inter alia, on the aggregate amount and the characteristics of our common
stock issued or offered in the Republic of Italy, applies; and
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(c)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>in
compliance with any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in Germany  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This prospectus has not been prepared in accordance with the requirements for a securities or sales prospectus under the German Securities Prospectus
Act (Wertpapierprospektgesetz), the German Sales Prospectus Act (Verkaufsprospektgesetz), or the German Investment Act (Investmentgesetz). Neither the </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>119</FONT></P>

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<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>German
Federal Financial Services Supervisory Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht&#151;BaFin) nor any other German authority has been notified of the intention to
distribute shares of our common stock in Germany. Consequently, shares of our common stock may not be distributed in Germany by way of public offering, public advertisement or in any similar manner
AND THIS PROSPECTUS AND ANY OTHER DOCUMENT RELATING TO THE OFFERING, AS WELL AS INFORMATION OR STATEMENTS CONTAINED THEREIN, MAY NOT BE SUPPLIED TO THE PUBLIC IN GERMANY OR USED IN CONNECTION WITH ANY
OFFER FOR SUBSCRIPTION OF SHARES OF OUR COMMON STOCK TO THE PUBLIC IN GERMANY OR ANY OTHER MEANS OF PUBLIC MARKETING. Shares of our common stock are being offered and sold in Germany only to qualified
investors which are referred to in Section&nbsp;3, paragraph&nbsp;2 no.&nbsp;1, in connection with Section&nbsp;2, no.&nbsp;6, of the German Securities Prospectus Act, Section&nbsp;8f
paragraph&nbsp;2 no.&nbsp;4 of the German Sales Prospectus Act, and in Section&nbsp;2 paragraph&nbsp;11 sentence 2 no.&nbsp;1 of the German Investment Act. This prospectus is strictly for
use of the person who has received it. It may not be forwarded to other persons or published in Germany. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in Norway  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Shares of our common stock will not be offered in Norway other than (i)&nbsp;to investors who are deemed professional investors under
Section&nbsp;5-4 of the Norwegian Securities Trading Act of 1997 as defined in Regulation no.&nbsp;1424 of 9&nbsp;December 2005, or "Professional Investors", (ii)&nbsp;to fewer
than 100 investors that are not Professional Investors or with a total consideration of less than EUR 100,000 calculated over a period of 12&nbsp;months, or (iii)&nbsp;with a minimum subscription
amount of EUR 50,000. Consequently, no public offering will be made in
Norway and this prospectus has not been filed with or approved by any Norwegian authority. The prospectus must not be reproduced or otherwise distributed to others by the recipient. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Notice to prospective investors in Finland  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>This prospectus has not been prepared to comply with the standards and requirements regarding public offering set forth in the Finnish Securities
Market Act (1989/495, as amended) and it has not been approved by the Finnish Financial Supervision Authority. Shares of our common stock may not be offered, sold, advertised or otherwise marketed in
Finland under circumstances which constitute public offering of securities under Finnish law. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><I> Acceptance of prospectus  </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>By accepting this prospectus, the recipient hereof represents and warrants that he is entitled to receive it in accordance with the restrictions set
forth above and agrees to be bound by limitations contained herein. Any failure to comply with these limitations may constitute a violation of law. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>120</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="es78401_legal_matters"> </A>
<A NAME="toc_es78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  LEGAL MATTERS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The validity of our common stock offered by this prospectus will be passed upon for us by Foley&nbsp;&amp;&nbsp;Lardner, LLP, Jacksonville, Florida.
Certain legal matters in connection with this offering will be passed upon for the underwriters by Paul, Hastings, Janofsky&nbsp;&amp; Walker&nbsp;LLP, New York, New York. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="es78401_experts"> </A>
<A NAME="toc_es78401_2"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  EXPERTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The consolidated financial statements as of January&nbsp;2, 2010 and January&nbsp;3, 2009, and for each of the three fiscal years in the period
ended January 2, 2010, included in this prospectus, have been so included in reliance on the report of PricewaterhouseCoopers&nbsp;LLP, an independent registered certified public accounting firm,
given upon the authority as experts in auditing and accounting. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="es78401_where_you_can_find_more_information"> </A>
<A NAME="toc_es78401_3"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  WHERE YOU CAN FIND MORE INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We have filed a registration statement on Form&nbsp;S-1 under the Securities Act with the SEC for the shares of our common stock we are
offering by this prospectus. This prospectus does not include all of the information contained in the registration statement and the exhibits and schedules thereto. You should refer to the
registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not
necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document. We are required to file annual,
quarterly and special reports, proxy statements and other information with the SEC. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>You
can read our SEC filings, including the registration statement and the exhibits and schedules thereto, at the SEC's website at </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.sec.gov</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. You may
also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, DC 20549. You may also obtain copies of the documents at prescribed rates by
writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference facilities. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>121</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="INDEX_TO_FINANCIALS"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> BODY CENTRAL CORP.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fa78401_index_to_consolidated_financial_information"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B>  INDEX TO CONSOLIDATED FINANCIAL INFORMATION    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>
<A NAME="FA78401_TOC"></A> </FONT></P>
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<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Page </B></FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fb78401_report_of_independent_register__rep02636"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Report of Independent Registered Certified
Public Accounting Firm</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fb78401_report_of_independent_register__rep02636"><FONT COLOR="#3B5A6F" SIZE=2>F-2</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#1"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Consolidated Balance Sheets as of January&nbsp;3, 2009 and January&nbsp;2,
2010</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#1"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-3</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#2"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Consolidated Statements of Operations for the Fiscal Years Ended
December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#2"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-4</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#3"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Consolidated Statements of Stockholders' Deficit for the Fiscal Years Ended
December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#3"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-5</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#4"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Consolidated Statements of Cash Flows for the Fiscal Years Ended
December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#4"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-6</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fk78401_body_central_corp._notes_to_co__bod02439"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Notes to Consolidated Financial
Statements</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fk78401_body_central_corp._notes_to_co__bod02439"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-7</FONT></A></TD>
</TR>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#5"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Consolidated Balance Sheets as of October&nbsp;3, 2009, January&nbsp;2, 2010
and October&nbsp;2, 2010 (Unaudited)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#5"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-27</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><A HREF="#6"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Consolidated Statements of Operations for the Thirty-Nine Weeks Ended
October&nbsp;3, 2009 and October&nbsp;2, 2010 (Unaudited)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#6"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-28</FONT></A></TD>
</TR>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#7"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended
October&nbsp;3, 2009 and October&nbsp;2, 2010 (Unaudited)</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#7"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-29</FONT></A></TD>
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<TD VALIGN="TOP" style="font-family:times;"><A HREF="#fy78401_body_central_corp._notes_to_un__bod02847"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Notes to Unaudited Consolidated
Financial Statements</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><A HREF="#fy78401_body_central_corp._notes_to_un__bod02847"><FONT COLOR="#3B5A6F" SIZE=2><BR>
F-30</FONT></A></TD>
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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fb78401_report_of_independent_register__rep02636"> </A>
<A NAME="toc_fb78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  Report of Independent Registered Certified Public Accounting Firm    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>To
the Board of Directors and<BR>
Stockholders of Body Central Corp.: </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' deficit and cash flows present fairly, in all material respects, the
financial position of Body Central Corp. and its subsidiaries at January&nbsp;2, 2010 and January&nbsp;3, 2009, and the results of their operations and their cash flows for each of the three years
in the period ended January&nbsp;2, 2010 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the
Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>/s/
PricewaterhouseCoopers LLP </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Jacksonville,
Florida<BR>
July&nbsp;7, 2010, except for the effects of the stock split described in Note&nbsp;1 as to which the date is October&nbsp;13, 2010 </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-2</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="1"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fc78401_body_central_corp._consolidated_balance_sheets"> </A>
<A NAME="toc_fc78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    CONSOLIDATED BALANCE SHEETS    <BR>    </B></FONT></P>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except<BR>
share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Assets</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Current assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,002</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,226</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts receivable, net of allowance for doubtful accounts of $23 and $16</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>828</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>910</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Income taxes receivable</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>429</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,612</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,898</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Prepaid expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,382</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,639</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Deferred tax asset, current</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>917</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,167</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total current assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>23,170</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>24,848</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Property and equipment, net</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
14,390</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
14,912</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Goodwill</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,508</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,508</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Intangible assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>18,557</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17,824</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>102</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>117</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>77,727</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79,209</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Liabilities, Redeemable Preferred Stock and Stockholders' Deficit</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9,252</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9,078</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accrued expenses and other current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,616</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,487</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Current portion of long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>25,868</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>26,815</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
3,336</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
4,361</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Deferred tax liability, long-term</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>74</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,886</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Long-term debt, less current portion</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>38,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>67,528</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>66,062</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Commitments and contingencies (Note 8)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Redeemable Preferred Stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred Stock, Series&nbsp;D, $0.001 par value, no shares authorized, issued or outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred Stock, Series&nbsp;C, $0.001 par value, 30,000 shares authorized, issued and outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,268</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,418</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred Stock, Series&nbsp;A, $0.001 par value, 325,000 shares authorized, 308,820 shares issued and
outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred Stock, Series&nbsp;B, $0.001 par value, 175,000 shares authorized, 158,386 shares issued and
outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stockholders' deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Common Stock, $0.001 par value, 19,053,345 shares authorized, 203,235 shares issued and outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Additional paid-in capital</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>271</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>289</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accumulated deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,960</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(37,180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total stockholders' deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,689</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(36,891</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total liabilities, redeemable preferred stock and stockholders' deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>77,727</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79,209</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Par value of issued and outstanding Common Stock is inconsequential. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
accompanying notes are an integral part of these consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-3</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="2"></A> </FONT></P>

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NAME="fe78401_body_central_corp._con__fe702299"> </A>
<A NAME="toc_fe78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    CONSOLIDATED STATEMENTS OF OPERATIONS    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
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<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except share and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net revenues</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>195,911</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>191,824</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>198,834</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cost of goods sold, including occupancy, buying, distribution center and catalog costs</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>140,334</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>137,982</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>139,145</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>55,577</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>53,842</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>59,689</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>51,832</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>45,555</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>46,567</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,469</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,357</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Impairment of long-lived assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,428</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>936</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>196</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,962</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>(Loss) income from operations</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(38,114</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,994</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8,248</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Interest expense, net of interest income of $544, $140 and $21</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,215</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,329</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,956</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other expense (income), net</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>238</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(493</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(128</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>(Loss) income before income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(42,567</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,842</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,420</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>(Benefit from) provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,237</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(890</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,330</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(952</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,780</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income per common share:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(194.10</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5.42</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12.94</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(194.10</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5.42</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.23</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted average common shares outstanding:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,173,978</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The accompanying notes are an integral part of these consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-4</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="3"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fg78401_body_central_corp._consolidate__bod02673"> </A>
<A NAME="toc_fg78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="72pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="70pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Common<BR>
Stock<BR>
Shares </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Additional<BR>
Paid-In<BR>
Capital </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>(Accumulated<BR>
Deficit)<BR>
Retained<BR>
Earnings </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total<BR>
Stockholders'<BR>
Deficit </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at December&nbsp;30, 2006</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>397</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>322</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>719</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stock option compensation expense</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>28</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>28</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividends payable on Series&nbsp;C Preferred Stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(118</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(118</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net loss</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,330</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,330</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at December&nbsp;29, 2007</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>307</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,008</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(38,701</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stock option compensation expense</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
114</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
114</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividends payable on Series&nbsp;C Preferred Stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(150</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(150</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net loss</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(952</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(952</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at January&nbsp;3, 2009</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>271</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,960</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,689</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stock option compensation expense</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
168</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
168</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividends payable on Series&nbsp;C Preferred Stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(150</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(150</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,780</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,780</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><p style="font-family:times;margin-left:9pt;text-indent:-9pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at January&nbsp;2, 2010</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>289</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(37,180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(36,891</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Par value of issued and outstanding Common Stock is inconsequential. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
accompanying notes are an integral part of these consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-5</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="4"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fi78401_body_central_corp._con__fi702276"> </A>
<A NAME="toc_fi78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    CONSOLIDATED STATEMENTS OF CASH FLOWS    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash flows from operating activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,330</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(952</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,780</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Adjustments to reconcile net (loss) income to net cash provided by operating activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,469</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,357</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stock-based compensation</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>28</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>114</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>168</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Loss on impairment of long-lived assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>36,390</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>936</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>196</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Deferred income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,577</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(275</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,561</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other non-cash charges (credits)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>857</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(220</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>123</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Changes in assets and liabilities:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts receivable</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,919</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,545</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(105</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,558</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,834</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>421</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,850</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(450</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,714</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Prepaid expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>649</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(54</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(256</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts payable and accrued expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,075</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,791</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>697</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(15</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,238</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>174</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,056</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net cash provided by operating activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,175</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,220</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,018</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash flows from investing activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Purchases of property and equipment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(9,656</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,640</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,809</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Proceeds from sales of assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>300</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net cash used in investing activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(9,656</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,340</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,794</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash flows from financing activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Principal payments on long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Proceeds from issuance of preferred stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net cash used in financing activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (decrease) increase in cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,981</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,370</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,224</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash and cash equivalents</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Beginning of year</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9,353</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,372</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,002</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>End of year</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,372</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,002</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,226</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Supplemental disclosures</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cash paid for interest</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,085</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,602</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,887</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cash paid for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,435</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>136</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>51</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Noncash financing activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividends payable</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>118</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>150</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>150</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The accompanying notes are an integral part of these consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-6</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fk78401_body_central_corp._notes_to_co__bod02439"> </A>
<A NAME="toc_fk78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Nature of Business  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Body Central Corp. (the "Company") is a specialty fashion retailer of young women's apparel and accessories operating retail centers in the South,
Mid-Atlantic and Midwest regions of the United States. In addition, the Company operates an e-commerce website, www.bodyc.com, and a catalog mail system. Approximately 34% of merchandise
is purchased from five manufacturers. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Stock Split  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On October&nbsp;13, 2010, a 25.40446-for-1 stock split of the Company's outstanding Common Stock was implemented. All Common Stock shares, per
share data, and option exercise prices in the accompanying consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted for all periods
presented to give effect to the stock split. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Principles of Consolidation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The accompanying Consolidated Financial Statements, prepared in accordance with accounting principles generally accepted in the United States of
America ("GAAP"), include the assets, liabilities, revenues and expenses of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in
consolidation. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Fiscal Year End  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company's fiscal year ends on the Saturday closest to December&nbsp;31. Fiscal years 2007, 2008 and 2009 ended on December&nbsp;29, 2007,
January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively. Fiscal years 2009 and 2007 included 52&nbsp;weeks. Fiscal year 2008 included 53&nbsp;weeks. References to years in the Consolidated
Financial Statements relate to fiscal years rather than calendar years. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Use of Estimates  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Segment Reporting  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>GAAP has established guidance for reporting information about a company's operating segments, including disclosures related to a company's products
and services, geographic areas and major customers. The Company has aggregated its net revenues generated from its retail centers, e-commerce website and catalog mail system into one
operating segment. We aggregate our operating segments because they have a similar class of customer, nature of products, nature of production process and distribution methods as well as similar
economic
characteristics. The Company has no international sales. All of the Company's identifiable assets are in the United States. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Revenue Recognition  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company recognizes revenue, and the related cost of goods sold is expensed, at point-of-sale or upon shipment to
customers. Shipping and handling fees billed to customers for online and catalog </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-7</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>

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<A NAME="page_fk78401_1_8"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>sales
are included in net revenues, and the related shipping and handling costs are included in cost of goods sold. Based on historical sales returns, an allowance for sales returns is recorded as a
reduction of net revenues in the periods in which the sales are recognized. Sales tax collected from customers is excluded from net revenues and is included as part of accrued expenses and other
current liabilities on the Consolidated Balance Sheets. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company sells gift certificates in its retail stores, which do not expire or lose value over periods of inactivity. The Company accounts for gift certificates by recognizing a liability at the
time a gift certificate is sold. The customer liability balance was $982,000 and $1.2&nbsp;million, as of January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively, and is included in accrued
expenses and other current liabilities on the Consolidated Balance Sheets. The Company recognizes income from gift certificates when they are redeemed by the customer. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Revenue
from unredeemed gift certificates is recognized when it is determined that the likelihood of the gift certificate being redeemed is remote and that there is no legal obligation to remit
unredeemed gift certificates to relevant jurisdictions. Revenue from gift certificate breakage is immaterial to our financial position. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Cash and Cash Equivalents  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company considers all short-term investments with an initial maturity of three months or less when purchased to be cash equivalents. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Inventories  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Inventories are comprised principally of women's apparel and accessories and are stated at the lower of cost or market, on a
first-in-first out basis, using the retail inventory method. The Company determines market value as the anticipated future selling price of the merchandise less a normal
margin. An initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. Permanent markdowns, when taken, reduce both the retail and cost
components of inventory on-hand so as to maintain the already established cost-to-retail relationship. Shipping and handling costs of $3.2&nbsp;million,
$3.4&nbsp;million and $3.4&nbsp;million for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009, and January&nbsp;2, 2010, respectively, are included in cost of goods sold in
the Consolidated Statements of Operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company reviews its inventory levels to identify slow-moving merchandise and generally use markdowns to clear this merchandise. The Company records a markdown reserve based on
estimated future markdowns related to current inventory to clear slow-moving inventory. These markdowns may have an adverse impact on earnings, depending on the extent and amount of
inventory affected. The markdown reserve is recorded as an increase to cost of goods sold in the Consolidated Statements of Operations. The markdown reserve was $1.7&nbsp;million and
$1.6&nbsp;million as of January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Included
in the carrying value of merchandise inventories is a reserve for shrinkage. Shrinkage is estimated based on historical physical inventory results as a percentage of sales. The estimate for
shrinkage reserve can be affected by changes in merchandise mix and changes in actual shrinkage </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-8</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>trends.
The shrink reserve was $416,000 and $407,000 as of January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Property and Equipment  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed for
financial reporting purposes on the straight-line method using service lives ranging principally from three to fifteen years. Furniture and fixtures are typically depreciated over three to
five years. Amortization of leasehold improvements is provided on the straight-line method over the length of the lease or over the estimated useful life of the improvement, whichever is
shorter. The cost of assets sold or retired and the related accumulated depreciation or amortization is removed from the accounts with any resulting gain or loss included in net income. Major renewals
and betterments which extend service lives are capitalized, while expenditures for repairs and maintenance that do not significantly extend the life of the asset are expensed as incurred. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Impairment of Long-Lived Assets  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company follows Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")&nbsp;360, </FONT> <FONT COLOR="#3B5A6F" SIZE=2><I>Property, Plant and Equipment</I></FONT><FONT
COLOR="#3B5A6F" SIZE=2>, which requires impairment losses to be recorded on long-lived assets used in operations whenever events or
changes in circumstances indicate that the net carrying amounts may not be recoverable. The evaluation is performed based on estimated undiscounted future cash flows from operating activities compared
with the carrying value of related assets for the individual stores. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized as the difference between
the carrying value and the estimated fair value of the assets based on the discounted future cash flows of the assets using a rate that approximates the Company's weighted average cost of capital. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Goodwill  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company follows FASB ASC&nbsp;350, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Intangibles&#151;Goodwill and Other</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, regarding
goodwill and other intangible assets. Goodwill and indefinite life intangibles are subject to an assessment of impairment at least annually. The guidance under this statement requires the Company to
compare the fair value of each reporting unit with its carrying amount to determine if there is a potential impairment of goodwill. If the fair value of the reporting unit is less than its carrying
value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than its carrying value. Goodwill of $55.5&nbsp;million was recognized on
the acquisition of Body Shop of America,&nbsp;Inc. and Catalogue Ventures, Inc on October&nbsp;1, 2006. The Company recognized an impairment on this goodwill of $34.0&nbsp;million associated
with its stores during the fiscal year ended December&nbsp;29, 2007 as a result of the slowing economy, repositioning, competition with other retailers and operating performance of the stores. The
Company performed its annual impairment analysis as of January&nbsp;3, 2009 and January&nbsp;2, 2010 using the discounted cash flow and guideline public company methods to determine the fair value
of the reporting units. The Company's analysis indicated no impairment of goodwill had occurred or was at-risk as of January&nbsp;3, 2009 and January&nbsp;2, 2010. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-9</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Intangible Assets  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Favorable and unfavorable retail leases and customer relationships are amortized using the straight-line method over their estimated
period of benefit, ranging from four to seven years. Trade names and trademarks are deemed to be indefinite life intangibles and are thus not subject to amortization. Management of the Company
evaluates the recoverability of intangible assets annually and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate impairment exists. The
Company's evaluation indicated no impairment of intangible assets in fiscal years ended December&nbsp;27, 2007, January&nbsp;3, 2009 or January&nbsp;2, 2010. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Accounting for Stock Based Compensation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company has adopted the provisions of FASB ASC&nbsp;718, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Compensation&#151;Stock
Compensation</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of this statement, stock-based compensation expense is
measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the employee's requisite service period
(generally the vesting period of the equity grant). As required under this guidance, the Company estimates forfeitures for options granted which are not expected to vest. Changes in these inputs and
assumptions can materially affect the measurement of the estimated fair value of the Company's stock-based compensation expense. Stock-based compensation expense is included in selling, general and
administrative expenses in the accompanying Consolidated Statements of Operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Operating Leases  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company leases retail stores and office space under noncancelable operating leases. Most store leases contain construction allowance
reimbursements by landlords, rent escalation clauses and/or contingent rent provisions. Except for contingent rent, the Company recognizes rent expense on a straight-line basis over the
lease term and records the difference between the amount charged to expense and the rent paid as a deferred rent liability. Contingent rent, determined based on a percentage of sales in excess of
specified levels, is recognized as rent expense when achievement of the specified sales that triggers the contingent rent is probable. Cash reimbursements received from landlords for leasehold
improvements as lease incentives are also recorded as deferred rent and are amortized using the straight-line method over the lease term as an offset to rent expense. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-10</FONT></P>

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<P style='font-family:times;page-break-before:always'></p>
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Deferred Rent and Tenant Allowances  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Deferred rent is recognized when a lease contains a predetermined fixed escalation of minimum rent. The Company recognizes the related rent expense
on a straight-line basis from possession date and records the differences between the recognized rental expense and the amounts payable under the lease as deferred rent. Also included in
deferred rent are tenant allowances received from landlords in accordance with negotiated lease terms. The tenant allowances are amortized as a reduction to rent expense on a straight-line
basis over the term of the lease. Deferred rent is included in other liabilities in the accompanying Consolidated Balance Sheets. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Advertising  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company expenses advertising costs in the period in which they occurred. Advertising expense, which is classified in selling, general and
administrative expenses in the accompanying Consolidated Statements of Operations, was $2.6&nbsp;million, $914,000, and $869,000 for fiscal years December&nbsp;29, 2007, January&nbsp;3, 2009 and
January&nbsp;2, 2010, respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Income Taxes  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Income taxes are accounted for pursuant to FASB ASC&nbsp;740, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Income Taxes,</I></FONT><FONT COLOR="#3B5A6F" SIZE=2> which requires that the
Company recognize deferred tax assets, which include net operating loss carry forwards and tax credits. Deferred income taxes are determined based on the difference between the financial reporting and
tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are offset by deferred tax liabilities relating
to nondeductible temporary differences. Recognition of deferred tax assets is based on management's belief that it is more likely than not that the tax benefit associated with temporary differences
will be utilized. The FASB issued guidance requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets
will not be realized. It has been determined that valuation allowances against the deferred tax assets are not currently necessary. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company follows FASB ASC&nbsp;740, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Income Taxes</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, guidance on accounting for uncertainty in income taxes. The standard prescribes a recognition
threshold and measurement attributable for financial statement recognition and measurement of tax positions taken or expected to be taken in tax returns. In addition, the standard provides guidance on
the de-recognition, classification and disclosure of tax positions, as well as the accounting for related interest and penalties. In May&nbsp;2007, the FASB amended the guidance
associated with the criteria that must be evaluated in determining if a tax position has been effectively settled and should be recognized as a tax benefit. The Company does not have any uncertain tax
provisions recorded in its Consolidated Financial Statements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Interest
and penalties, if any, are recognized in the provision for income taxes in the Consolidated Statements of Operations. Accrued interest and penalties, if applicable, are included within the
related tax liability line on the Consolidated Balance Sheets. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-11</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Cost of Goods Sold  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Cost of goods sold includes the direct cost of purchased merchandise, distribution costs, all freight costs incurred to get merchandise to our stores
and our direct customers, costs incurred to produce and distribute our catalogs, store occupancy costs and buying costs. In addition, markdowns taken, markdown reserves for slow moving items and
inventory reserves are included in cost of goods sold. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Selling, General and Administrative  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses include operating expenses not in cost of goods sold, primarily administration, marketing, stock-based
compensation and store operating expenses. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Store Opening Costs  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Store opening costs, which consist primarily of occupancy costs and payroll, are expensed as incurred and are included in selling, general and
administrative expense in the Consolidated Statements of Operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Insurance and Self-Insurance  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company uses a combination of insurance and self-insurance for a number of risk management activities including workers'
compensation, general liability, automobile liability and employee-related health care benefits, a portion of which is paid by the employees. Costs related to claims are accrued based on known claims
and historical experiences of incurred but not reported claims received from our insurers. The Company believes that it has adequately reserved for its self-insurance liability, which is
capped through the use of stop-loss contracts and specified retentions with insurance companies. However, any significant variation of future claims from historical trends could cause
actual results to differ from the accrued liability. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Concentration of Credit Risk  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Financial instruments subject to concentrations of credit risk consist primarily of cash. The Company places its cash with what it believes to be
high credit quality institutions. At times such instruments may be in excess of the FDIC insurance limit. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-12</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> New Accounting Standards  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In June&nbsp;2009, authoritative guidance was issued which establishes the FASB ASC as the source of authoritative GAAP recognized by the FASB to
be applied by nongovernmental entities. This guidance, which was incorporated into </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Generally Accepted Accounting Principles</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, is effective for annual
periods ending after September&nbsp;15, 2009. The Company adopted the guidance in fiscal year ended January&nbsp;2, 2010 and changed certain disclosure references. This change did not have any
other impact on the Company's Consolidated Financial Statements. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
May 2009, the FASB issued authoritative guidance included in FASB&nbsp;ASC&nbsp;855, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Subsequent Events</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. The guidance requires entities to
disclose the date through which they have evaluated subsequent events and whether that date corresponds with the release of their financial statements. The Company has evaluated subsequent events
through October&nbsp;13, 2010, the date the financial statements were available for issuance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
August&nbsp;2009, the FASB issued Accounting Standards Update (ASU)&nbsp;2009-05, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Measuring Liabilities at Fair Value</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>
(Topic&nbsp;820). The objective of the new guidance is to provide clarification for the fair value measurement of liabilities, specifically providing clarification that in circumstances in which a
quoted price in an active market for an identical liability is not available, a reporting entity is required to measure fair value using certain prescribed techniques. Techniques highlighted include
using 1)&nbsp;the quoted price of the identical liability when traded as an asset, 2)&nbsp;quoted prices for similar liabilities or similar liabilities when traded as assets or 3)&nbsp;another
valuation technique that is consistent with the principles of fair value measurements. The new guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not
required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. Finally, the guidance clarifies that
Level&nbsp;1 fair value measurements include both a quoted price in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active
market when no adjustment to the quoted price of the asset is required. The Company's adoption of this guidance did not have a material impact on its financial position or results of operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
January&nbsp;2010, the FASB issued ASU&nbsp;2010-06 </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Fair Value Measurements and Disclosures</I></FONT><FONT COLOR="#3B5A6F" SIZE=2> (Topic&nbsp;820): </FONT> <FONT COLOR="#3B5A6F" SIZE=2><I>Improving Disclosures
about Fair Value Measurements</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. The new guidance requires disclosures of transfers in and out of Level&nbsp;1 and 2 fair value
measurements, including a description of the reason for the transfer. The new guidance also calls for disclosures about the activity in Level&nbsp;3 measurements by separately presenting information
on purchases, sales, issuances and settlements on a gross basis rather than a single net number. The guidance also clarifies 1)&nbsp;the level of disaggregation that should be used in completing
disclosures about fair value measurements and 2)&nbsp;the disclosures required in describing the inputs and valuation techniques used for both nonrecurring and recurring fair value measurements.
This guidance is effective for interim and annual reporting periods beginning after December&nbsp;15, 2009, except for the new disclosures regarding the activity in Level&nbsp;3 measurements,
which became effective for fiscal years beginning after December&nbsp;15, 2010. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-13</FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 2. Property and Equipment  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
Property and equipment as of January&nbsp;3, 2009 and January&nbsp;2, 2010 consist of the following: </FONT></P>
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<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Furniture and fixtures</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,166</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8,878</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Leasehold improvements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,609</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>18,703</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>23,775</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>27,581</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accumulated depreciation and amortization</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(9,385</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(12,669</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Property and equipment, net</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,390</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,912</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization expense related to property and equipment was $4.8&nbsp;million, $4.7&nbsp;million and $4.0&nbsp;million for the fiscal
years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company incurred costs of $7.4&nbsp;million, $1.5&nbsp;million and $3.0&nbsp;million for capital expenditures, excluding tenant allowances of $2.3&nbsp;million, $1.2&nbsp;million and
$1.8&nbsp;million for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 3. Intangible Assets  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
Identifiable intangible assets recognized on the October&nbsp;1, 2006 acquisition of Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. consist of the following: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3, 2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Gross<BR>
Carrying<BR>
Amount </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Accumulated<BR>
Amortization </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Net<BR>
Value </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Amortized intangible assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Favorable retail leases</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,225</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,319</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,906</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Unfavorable retail leases</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(190</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(69</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(121</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Customer relationships</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>585</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>329</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>256</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,620</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,579</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,041</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Unamortized intangible assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Trade names and trademarks</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-14</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 3. Intangible Assets (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR></FONT></P>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="77pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Gross<BR>
Carrying<BR>
Amount </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Accumulated<BR>
Amortization </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Net<BR>
Value </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Amortized intangible assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Favorable retail leases</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,225</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,906</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,319</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Unfavorable retail leases</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(190</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(90</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Customer relationships</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>585</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>475</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>110</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,620</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,281</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,339</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Unamortized intangible assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Trade names and trademarks</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The unfavorable retail leases are included in other liabilities in the Consolidated Balance Sheets. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Aggregate
amortization expense related to intangible assets was $702,000 for each of the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010. Estimated
aggregate amortization expense for each of the three succeeding fiscal years is shown below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="83pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:48pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year

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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>665</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>556</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>118</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,339</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 4. Long-Term Debt  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The following is a summary of long-term debt outstanding at January&nbsp;3, 2009 and January&nbsp;2, 2010: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>$27.5&nbsp;million term loan, interest rate at LIBOR plus 5.25%, 8.5% as of January&nbsp;2, 2010, due
September&nbsp;30, 2012, principal and interest due quarterly.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>22,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>$24&nbsp;million term loan, interest rate at LIBOR plus 5.75%, 9.0% as of January&nbsp;2,
2010, interest due quarterly; all principal due October&nbsp;1, 2013.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
21,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
21,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>43,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>38,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Less current portion</FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
(5,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
(5,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="TOP" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>38,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:times;">&nbsp;</TD>
<TD style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-15</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=144,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=591407,FOLIO='F-15',FILE='DISK135:[11ZAK1.11ZAK78401]FM78401A.;4',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fm78401_1_16"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 4. Long-Term Debt (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Combined maturities of long-term debt are as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="83pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:48pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year

<!-- COMMAND=ADD_SCROPPEDRULE,48pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,250</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,375</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,625</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>38,250</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company entered into an interest rate swap agreement that involves the receipt of variable rate payments based on the one-month LIBOR rate in
exchange for 5.22% fixed rate payments over the life of the swap agreement without an exchange of the underlying notional amount of $25.0&nbsp;million that was terminated on November&nbsp;13,
2008. The differential to be paid or received was accrued and recognized as an adjustment to interest expense as interest rates change. The interest rate swap was not designated as a cash flow hedge.
Accordingly, it was reflected at fair value on the Consolidated Balance Sheets and the related change in fair value is reflected in interest expense. The net effect of the agreement was $199,000 of
expense for the fiscal year ended January&nbsp;3, 2009. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company also has a revolving credit facility that provides for advances up to $15.0&nbsp;million with a maturity date of October&nbsp;1, 2012. There were no amounts outstanding under the
revolving line of credit as of January&nbsp;3, 2009 and January&nbsp;2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Both
of the term loans and the revolving credit facility are collateralized by substantially all the Company's assets and a pledge of stock in its subsidiaries. The interest rates range from LIBOR
plus 5.25% to LIBOR plus 5.75% with interest paid quarterly with a floor for LIBOR of 3.25%. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
terms of the loan agreements contain certain restrictive covenants, which require, among other things, the maintenance of a maximum ratio of debt to earnings before interest, taxes, depreciation
and amortization ("EBITDA"), a minimum fixed charge coverage ratio and maximum capital
expenditures. The Company received waivers of covenant violations regarding the senior leverage ratio and minimum fixed charge coverage ratio at January&nbsp;3, 2009, and was in compliance with all
other covenants. The Company was in compliance with all covenants at January&nbsp;2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 5. Financial Instruments  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company follows the FASB issued guidance, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Fair Value Measurements</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, which establishes a framework for measuring fair value that is based on the
inputs market participants use to determine fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The guidance under this statement describes a
hierarchy of three levels of input that may be used to measure fair value: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Level&nbsp;1&nbsp;&#151; Inputs based on quoted prices in active markets for identical assets and liabilities. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-16</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fm78401_1_17"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 5. Financial Instruments (Continued) </B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Level&nbsp;2&nbsp;&#151; Inputs other than Level&nbsp;1 quoted prices, such as quoted prices for similar
assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset
or liability. </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Level&nbsp;3&nbsp;&#151; Unobservable inputs based on little market or no market activity and which are
significant to the fair value of the assets and liabilities. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company's material financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued expenses and long-term debt. The fair values of cash, accounts
receivable, accounts payable and accrued expenses are equal to their carrying values based on their liquidity. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
carrying amount reported in the Consolidated Balance Sheet as of January&nbsp;2, 2010 for long-term debt is $38.3&nbsp;million. Using a discounted cash flow technique that
incorporates a market interest yield curve with adjustments for duration and risk profile, the Company has determined the fair value of its debt to be $37.2&nbsp;million at January&nbsp;2, 2010.
Considerable judgment is required in interpreting market data to develop estimates of fair value. The fair value estimate presented herein is not necessarily indicative of the amount that the Company
or the debt holders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair value. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Although
the fair value of the long-term debt is less than its carrying amount, the Company does not anticipate settling its outstanding debt at the reported fair value. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company has determined the estimated fair value amounts of its financial instruments using available market information. As of January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively, the
assets that are measured at fair value on a recurring basis include the following: </FONT></P>
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<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fair Value Measurements Using </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total<BR>
January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Quoted<BR>
Prices in<BR>
Active<BR>
Markets<BR>
(Level&nbsp;1) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Other<BR>
Observable<BR>
Inputs<BR>
(Level&nbsp;2) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Unobservable<BR>
Inputs<BR>
(Level&nbsp;3) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Money market securities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>508</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>508</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="53pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fair Value Measurements Using </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total<BR>
January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Quoted<BR>
Prices in<BR>
Active<BR>
Markets<BR>
(Level&nbsp;1) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Other<BR>
Observable<BR>
Inputs<BR>
(Level&nbsp;2) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Unobservable<BR>
Inputs<BR>
(Level&nbsp;3) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Money market securities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,653</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,653</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Money market securities, which are short-term investments of excess cash, are classified as cash and cash equivalents on the Consolidated Balance Sheets. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-17</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=146,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=834497,FOLIO='F-17',FILE='DISK135:[11ZAK1.11ZAK78401]FM78401A.;4',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fm78401_1_18"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 6. Leases  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company conducts all of its retail sales and corporate operations in leased facilities. Lease terms generally range up to ten years and provide for escalations in base rents. The Company does not
have obligations to renew the leases. Certain leases provide for contingent rentals based upon sales. Most leases also require additional payments covering real estate taxes, common area costs and
insurance. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Future
minimum rental commitments, by year and in the aggregate, under noncancelable operating leases as of January&nbsp;2, 2010, are as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="83pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:48pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year

<!-- COMMAND=ADD_SCROPPEDRULE,48pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,802</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,838</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8,944</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,969</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,279</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Thereafter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,485</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>63,317</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Rent expense under non cancelable operating leases was as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Minimum rentals</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,916</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,995</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,199</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Contingent rentals</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,226</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,028</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,273</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total rent expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,142</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,023</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,472</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 7. Redeemable Preferred Stock  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company has four classes of redeemable preferred stock detailed below. The order of liquidation
preference is Series&nbsp;D, C, A and B. The following is a summary of changes in each issue of redeemable preferred stock: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="49pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Redeemable Preferred Stock </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Series&nbsp;D </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Series&nbsp;C </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Series&nbsp;A </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Series&nbsp;B </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at December&nbsp;30, 2006</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock issued</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividends payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>118</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at December&nbsp;29, 2007</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,118</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividends payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at January&nbsp;3, 2009</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,268</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dividends payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Balance at January&nbsp;2, 2010</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,418</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-18</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=147,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=647695,FOLIO='F-18',FILE='DISK135:[11ZAK1.11ZAK78401]FM78401A.;4',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fm78401_1_19"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 7. Redeemable Preferred Stock (Continued) </B></FONT></P>
 </DIV>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Nonvoting, Nonconvertible Series&nbsp;D Preferred Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In April&nbsp;2008, the Company approved the conditional authorization and issuance of up to 61,000 shares of Series&nbsp;D Preferred Stock, par
value $0.001 per share. This authorization will only be effective in the event that a draw is made on letters of credit issued for the account of certain stockholders of the Company to secure the
guaranty of indebtedness of the Company under the loan agreements described in Note&nbsp;4. If authorized and issued, the Series&nbsp;D Preferred Stock will have a preference upon liquidation of
$100 per share, plus accrued dividends, senior to the Series&nbsp;A, B and C Preferred Stock. If authorized and issued, the holders of Series&nbsp;D Preferred Stock will be entitled to receive
dividends at an annual rate of 5% of $100 per share accruing quarterly beginning on the date of issuance. The shares of Series&nbsp;D Preferred Stock are subject to redemption rights by the holders
and the Company in certain circumstances. The Series&nbsp;D Preferred Stock generally is nonvoting except in certain circumstances. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Nonvoting, Nonconvertible Series&nbsp;C Preferred Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In March&nbsp;2007, the Company issued 30,000 shares of Series&nbsp;C Preferred Stock in exchange for $3.0&nbsp;million paid to the sellers of
shares of Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. in October&nbsp;2006. The shares of Series&nbsp;C Preferred Stock have a preference upon liquidation of $100 per
share, plus accrued dividends. The holders of Series&nbsp;C Preferred Stock are entitled to receive dividends at an annual rate of 5% of $100 per share accruing quarterly beginning on the date of
issuance. The shares of Series&nbsp;C Preferred Stock are subject to redemption rights at the election of the holders and at the election of the Company in certain circumstances. These redemption
rights are subject to, among other things, restrictions under the Company's debt instruments. Generally, the Series&nbsp;C Preferred Stock is nonvoting except in certain circumstances. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Convertible Series&nbsp;A Preferred Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In October&nbsp;2006, the Company issued 308,820 shares of Series&nbsp;A Preferred Stock for a purchase price of $100 per share to various
investors, including 15,000 shares acquired by a former member of management. Each share is currently convertible to 25.40446 shares of Common Stock of the Company at the election of the holder or
automatic conversion in certain circumstances, including an initial public offering. If the shares of Series&nbsp;A Preferred Stock have not converted to Common Stock, then they have a preference
upon liquidation equivalent to $100 per share. The shares have voting rights equal to the number of shares of Common Stock to which they are convertible. Series&nbsp;A Preferred Stock is redeemable
in the event of a sale or disposition of more than 50% of the outstanding voting stock; a consolidation or merger; or a sale, license or other transfer of all or substantially all of the assets of the
Company. Shares of Series&nbsp;A Preferred Stock do not participate in dividends. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-19</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=148,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=332694,FOLIO='F-19',FILE='DISK135:[11ZAK1.11ZAK78401]FM78401A.;4',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fm78401_1_20"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 7. Redeemable Preferred Stock (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Convertible Series&nbsp;B Preferred Stock  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In October&nbsp;2006, the Company issued 158,386 shares of Series&nbsp;B Preferred Stock in exchange for a contribution by members of management
of shares of Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. prior to the purchase of the remaining shares of those companies. Each share is currently convertible to 25.40446
shares of Common Stock of the Company at the election of the holder or automatic conversion in certain circumstances, including an initial public offering. If the shares of Series&nbsp;B Preferred
Stock have not converted to Common Stock, then they have a preference upon liquidation equivalent to $97.49 per share. The shares have voting rights equal to the number of shares of Common Stock to
which they are convertible. Series&nbsp;B Preferred Stock is redeemable in the event of a sale or disposition of more than 50% of the outstanding voting stock; a consolidation or merger; or a sale,
license or other transfer of all or substantially all of the assets of the Company. Shares of Series&nbsp;B Preferred Stock do not participate in dividends. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 8. Commitments and Contingencies  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Employment Contracts  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company is subject to employment agreements with certain executives, which provide for compensation and other certain benefits. The agreements
also provide for severance payments under certain circumstances. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Litigation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company is involved in various routine legal proceedings incidental to the conduct of its business. In the opinion of management, based on the
advice of in-house and external legal counsel, the lawsuits and claims pending are not likely to have a material adverse effect on the Company's financial condition, results of operations
or cash flows. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Transaction Bonus Plan  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company is subject to a transaction bonus plan in which specified employees, including certain named executive officers, are to receive an
aggregate of up to $1.0&nbsp;million upon the completion of an initial public offering of the Company's stock. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-20</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=149,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=274968,FOLIO='F-20',FILE='DISK135:[11ZAK1.11ZAK78401]FM78401A.;4',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
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NAME="page_fo78401_1_21"> </A>


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</FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 9. Income Taxes  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The components of the income tax (benefit) provision for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010 are as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;27,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Current</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Federal</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(275</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>State</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>340</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(340</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>340</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(615</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Deferred</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Federal</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,808</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(394</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,435</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>State</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(769</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>119</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>126</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,577</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(275</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,561</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total (benefit) provision</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,237</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(890</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,640</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of the Company's net deferred tax asset (liability) related to continuing operations at January&nbsp;3, 2009 and
January&nbsp;2, 2010 are as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Reserves</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>137</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>173</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Property and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,685</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,675</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accrued expenses and other current liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>835</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>598</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Inventory</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>616</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>254</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stock-based compensation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>189</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>253</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>254</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>555</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Credits</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>142</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net operating losses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,459</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,951</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,109</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross deferred tax liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Intangibles</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(7,108</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(6,828</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross deferred tax liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(7,108</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(6,828</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net deferred tax asset (liability)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>843</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(719</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Recognition of deferred tax assets is based upon management's belief that it is more likely than not that a tax benefit associated with temporary differences
will be utilized. A valuation allowance has not been recorded as it is more likely than not that all deferred tax assets will be realized. At January&nbsp;2, 2010, the Company had deferred tax
assets related to net operating loss carryforwards of </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-21</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=150,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=103224,FOLIO='F-21',FILE='DISK135:[11ZAK1.11ZAK78401]FO78401A.;8',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fo78401_1_22"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 9. Income Taxes (Continued) </B></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>approximately
$1.5&nbsp;million which, if not utilized to reduce taxable income in future periods, will expire in 2028. As of the date of the audit, the Company is currently not under any
examination by any significant taxing authorities and the tax years that remain subject to examination by major tax jurisdictions under the statute of limitations are our fiscal years ended
January&nbsp;3, 2009 and forward. The effective rate differs from the statutory rate due to the following items: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Statutory rate</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> (34.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> (34.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34.0</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>State and local income taxes, net of federal benefit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4.5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>State tax true-up</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(7.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Goodwill impairment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>30.8</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(0.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1.4</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>(Benefit from) provision for income tax rate</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> (7.6</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2> (48.3</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)%</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>37.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 10. Stock-Based Compensation Plans  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company adopted an equity incentive plan in September&nbsp;2006 (the "Plan"). The Plan provides for the grant of options and other Company stock awards to employees, directors and consultants,
not to exceed 1,341,355 shares of Common Stock. The plan provides for benefits in the form of incentive stock options. Options granted to employees and directors under the Plan vest over a period of
four years and expire five to ten years from the date of grant. Options to purchase 377,256 shares of Common Stock were available for future grants under the Plan at January&nbsp;2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company estimates the fair value of each option award on the date of the grant using the Black-Scholes option valuation model. Estimates of fair value are not intended to predict actual future
events or the value ultimately realized by persons who receive equity awards. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the
expected option term, expected volatility of the Company's stock over the option's expected term, the risk-free interest rate over the option's expected term and the Company's expected
annual dividend yield. The Company issues new shares with the exercise of options. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
fair value of each option grant for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010 was estimated on the grant date using the Black-Scholes
option-pricing model with the following assumptions: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="92pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Expected option term<SUP>(1)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5.75&nbsp;-&nbsp;6&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6.25&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6.25&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Expected volatility factor<SUP>(2)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>53&nbsp;-&nbsp;60%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>66.1%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>71.0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Risk-free interest rate<SUP>(3)</SUP></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3.45%&nbsp;-&nbsp;4.55%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.8%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3.1%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Expected annual dividend yield</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(1)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Since
there was not sufficient historical information for grants with similar terms, the simplified or "plain-vanilla" method of estimating
option life was utilized.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(2)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
stock volatility for each grant is measured using the weighted average of historical weekly price changes of the Company's competitors'
common stock over the most recent period equal to the expected option life of the grant.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1><SUP>(3)</SUP></FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>The
risk-free interest rate for periods equal to the expected term of the share option is based on the rate of treasury securities
with the same term as the option as of the grant date. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-22</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=151,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=92008,FOLIO='F-22',FILE='DISK135:[11ZAK1.11ZAK78401]FO78401A.;8',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fo78401_1_23"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 10. Stock-Based Compensation Plans (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A summary of stock option information for the fiscal year ended January&nbsp;2, 2010 is as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

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<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="69pt" style="font-family:times;"></TD>
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<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Shares </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Weighted-<BR>
Average<BR>
Exercise<BR>
Price </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Weighted-<BR>
Average<BR>
Remaining<BR>
Contractual<BR>
Term </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Outstanding at January&nbsp;3, 2009</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>377,256</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2.30</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>586,843</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3.94</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Exercised</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Forfeited</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Outstanding at January&nbsp;2, 2010</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>964,099</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3.29</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Exercisable at January&nbsp;2, 2010</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>217,437</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2.69</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7.9&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The aggregate intrinsic value of outstanding and exercisable stock options, representing the excess of the average market price of the Company's stock on
January&nbsp;2, 2010 over the exercise price, multiplied by the applicable number of in-the-money options, was $128,000, at January&nbsp;2, 2010. There were 91,985
in-the-money options outstanding and exercisable at January&nbsp;2, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A
summary of the status of nonvested stock options as of January&nbsp;2, 2010 and changes during the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010
are presented below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="54pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="67pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Shares </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Weighted-<BR>
Average<BR>
Grant-Date<BR>
Fair Value </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Nonvested at December&nbsp;30, 2006</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>670,676</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>368,873</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.46</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(97,248</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.93</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Forfeited</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(783,016</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.93</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Nonvested at December&nbsp;29, 2007</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>159,285</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.44</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>209,587</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.76</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(75,451</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.46</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Forfeited</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Nonvested at January&nbsp;3, 2009</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>293,421</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.67</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>586,843</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.27</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(133,602</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.66</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Forfeited</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Nonvested at January&nbsp;2, 2010</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>746,662</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.14</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Stock-based compensation expense of $28,000, $114,000 and $168,000 for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and
January&nbsp;2, 2010, respectively, is included in selling, general and administrative expenses on the Company's Consolidated Statements of Operations. The Company did not capitalize any expense
related to stock-based payments. Total compensation cost related to nonvested awards not yet recognized was $666,000 as of January&nbsp;2, 2010, and is expected to be recognized over a weighted
average remaining period of 1.5&nbsp;years. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-23</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=152,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=410180,FOLIO='F-23',FILE='DISK135:[11ZAK1.11ZAK78401]FO78401A.;8',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fo78401_1_24"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 11. Accrued Expenses and Other Current Liabilities  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The major components of accrued expenses and other current liabilities are as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accrued payroll and related taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,279</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,234</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accrued occupancy</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,820</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,930</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Taxes, other than income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,549</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,505</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,968</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,818</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total accrued expenses and other current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,616</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,487</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 12. Savings Plan  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company provides a savings plan (the "Savings Plan") under Section&nbsp;401(k) of the Internal Revenue Code. The Savings Plan covers all employees who have attained age&nbsp;21 and completed
at least 1,000&nbsp;hours of service in a twelve consecutive month period. The Savings Plan requires specified contributions by the employees and allows discretionary contributions by the Company.
Total employer contribution expense was approximately $177,000, $145,000 and $153,000 for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010,
respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 13. Related Parties  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company leases office and warehouse space under a noncancelable lease agreement dated October&nbsp;1, 2006 with a company that is owned by certain members of management who are also stockholders
of the Company. The lease expires on October&nbsp;1, 2016. The Company incurred rent expense of $438,000, $446,000 and $468,000 for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3,
2009 and January&nbsp;2, 2010, respectively, related to this lease. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 14. Fair Value Measurements  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
Assets and liabilities measured at fair value on a nonrecurring basis consist of the following at January&nbsp;2, 2010: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"110%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="110%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="72pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Basis of Fair Value Measurements </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fair Value<BR>
of Assets<BR>
(Liabilities) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Quoted<BR>
Prices in<BR>
Active<BR>
Markets<BR>
for Identical<BR>
Items<BR>
(Level&nbsp;1) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Other<BR>
Observable<BR>
Inputs<BR>
(Level&nbsp;2) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Unobservable<BR>
Inputs<BR>
(Level&nbsp;3) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal year ended January&nbsp;2, 2010</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Long-lived assets held and used</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,800</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,800</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-24</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=153,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=318187,FOLIO='F-24',FILE='DISK135:[11ZAK1.11ZAK78401]FO78401A.;8',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fo78401_1_25"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 14. Fair Value Measurements (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the fiscal year ended January&nbsp;2, 2010, long-lived assets held and used in the Company's stores with a carrying value of
$7.0&nbsp;million were written down to their fair value of $6.8&nbsp;million. The inputs used to calculate the fair value of these store assets included the projected cash flows and
risk-adjusted rate of return that the Company estimated would be used by a market participant in valuing these assets. Utilizing this analysis, the Company recognized impairment charges of
$2.4&nbsp;million, $936,000 and $196,000 related to store assets for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 15. Quarterly Results (Unaudited)  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The following table presents summarized unaudited quarterly financial results of operations for the Company for the fiscal years ended January&nbsp;3, 2009 and January&nbsp;2, 2010. We believe all
necessary adjustments have been included in the amounts stated below to present fairly the following selected information when read in conjunction with the Consolidated Financial Statements and Notes
thereto included elsewhere herein. Future quarterly operating results may fluctuate depending on a number of factors. Results for any particular quarter are not necessarily indicative of results of
operations a full fiscal year or any other quarter. </FONT></P>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal 2008 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>First<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Second<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Third<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fourth<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>44,783</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>50,921</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>44,518</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>51,602</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,850</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,458</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,656</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,878</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,428</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>787</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(674</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,363</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic (loss) income per common share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(12.13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3.69</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3.50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6.52</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dilutive (loss) income per common share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(12.13</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.07</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3.50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="50pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal 2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>First<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Second<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Third<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fourth<BR>
Quarter </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>48,628</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>52,159</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>44,860</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>53,187</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,128</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>14,956</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,635</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,970</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net income</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>273</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>747</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>284</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,476</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic income per common share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.16</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3.49</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.21</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7.08</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Dilutive income per common share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.02</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.06</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.02</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.12</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The sum of the quarterly (loss) income per common share may not equal the full year amount as the computations of the weighted average common shares outstanding
for basic and diluted shares outstanding for each quarter and the full year are performed independently. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-25</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=154,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=374684,FOLIO='F-25',FILE='DISK135:[11ZAK1.11ZAK78401]FO78401A.;8',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fo78401_1_26"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 16. Earnings per Share  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per
common share includes the determinants of basic earnings per common share plus the additional dilution for all potentially dilutive stock options and convertible preferred stock utilizing the treasury
stock method and if-converted method, respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
following table shows the amounts used in computing earnings per share and the effect on net income and the weighted average number of shares potentially dilutive to Common Stock: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="81pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>December&nbsp;29,<BR>
2007 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except share and per&nbsp;share&nbsp;data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income as reported</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,330</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(952</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,780</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Less: Preferred stock dividends declared</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(118</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net (loss) income attributable to</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>common stockholders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(39,448</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,102</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,630</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted average basic common shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Impact of dilutive securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stock options</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>101,628</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Convertible preferred stock</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,869,115</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted average dilutive common shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,173,978</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Per common share:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic (loss) income per share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(194.10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5.42</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12.94</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted loss (income) per share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(194.10</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5.42</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.23</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Common
Stock equivalents totaling 11,869,115 would have been included in the diluted (loss) income per common share calculation for both fiscal years ended December&nbsp;29, 2007 and
January&nbsp;3, 2009, had we reported net income for these periods. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Equity
awards to purchase 167,669, 167,669, and 754,512 shares of Common Stock for the fiscal years ended December&nbsp;29, 2007, January&nbsp;3, 2009 and January&nbsp;2, 2010, respectively,
were outstanding, but were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-26</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
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</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="5"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fs78401_body_central_corp._con__fs702188"> </A>
<A NAME="toc_fs78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    CONSOLIDATED BALANCE SHEETS (UNAUDITED)    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="59pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="61pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>January&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(In thousands, except share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Assets</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Current assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,823</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,226</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>706</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts receivable, net of allowance for doubtful accounts of $16, $16 and $23</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>842</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>910</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>883</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17,180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,898</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>16,248</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Prepaid expenses and other current assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,287</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,814</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,845</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total current assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>28,132</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>24,848</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,682</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Property and equipment, net of accumulated depreciation and amortization of $15,403, $12,669 and
$11,870</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
17,367</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
14,912</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
14,085</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Goodwill</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,508</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,508</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>21,508</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Intangible assets, net of accumulated amortization of $2,930, $2,381 and $2,198</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17,275</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>17,824</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>18,007</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>116</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>117</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>245</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>84,398</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79,209</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>75,527</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=6 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B> Liabilities, Redeemable Preferred Stock and Stockholders' Deficit</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts payable</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,618</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>9,078</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8,424</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accrued expenses and other current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,731</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,487</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10,770</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Current portion of long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,250</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total current liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>29,349</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>26,815</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>25,194</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,883</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,361</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,330</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Deferred tax liability, long-term</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,083</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,886</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Long-term debt, less current portion</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>25,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34,500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>63,833</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>66,062</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>64,024</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Commitments and contingencies</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Redeemable Preferred Stock</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;D, $0.001 par value, no shares authorized, issued or outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;C, $0.001 par value, 30,000 shares authorized, issued and outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,531</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,418</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,381</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;A, $0.001 par value, 325,000 shares authorized, 308,820 shares issued and
outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>31,080</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Preferred stock, Series&nbsp;B, $0.001 par value, 175,000 shares authorized, 158,386 shares issued and
outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>15,540</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:11pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stockholders' deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Common stock, $0.001 par value, 19,053,345 shares authorized, 203,235 shares issued and outstanding</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Additional paid-in capital</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>531</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>289</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>158</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accumulated deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(30,117</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(37,180</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(38,656</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total stockholders' deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(29,586</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(36,891</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(38,498</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total liabilities, redeemable preferred stock and stockholders' deficit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>84,398</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>79,209</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>75,527</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Par value of issued and outstanding Common Stock is inconsequential. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
accompanying notes are an integral part of these unaudited consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-27</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=156,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=382702,FOLIO='F-27',FILE='DISK135:[11ZAK1.11ZAK78401]FS78401A.;6',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
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NAME="page_fu78401_1_28"> </A>


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</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="6"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fu78401_body_central_corp._consolidate__bod02620"> </A>
<A NAME="toc_fu78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Thirty-Nine Weeks Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except share and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net revenues</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>176,288</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>145,647</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Cost of goods sold, including occupancy, buying, distribution center and catalog costs</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>118,358</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>103,678</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Gross profit</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>57,930</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>41,969</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Selling, general and administrative expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>40,621</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>33,550</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,510</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Income from operations</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,799</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,901</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Interest expense, net of interest income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,581</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,985</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other income, net of other expense</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(105</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(157</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Income before income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,323</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,073</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Provision for income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,260</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>769</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,063</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,304</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net income per common share:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34.20</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5.86</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.57</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.11</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted-average common shares outstanding:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>203,235</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,447,411</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,157,584</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The accompanying notes are an integral part of these unaudited consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-28</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=157,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=837504,FOLIO='F-28',FILE='DISK135:[11ZAK1.11ZAK78401]FU78401A.;7',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
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NAME="page_fw78401_1_29"> </A>


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</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A NAME="7"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fw78401_body_central_corp._consolidate__bod02593"> </A>
<A NAME="toc_fw78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="64pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Thirty-Nine<BR>
Weeks Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;2,<BR>
2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;3,<BR>
2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash flows from operating activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net income</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,063</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,304</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Adjustments to reconcile net income to net cash provided by operating activities:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,510</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,518</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Deferred income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,197</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(159</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other non-cash charges</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(361</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(723</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Changes in assets and liabilities:</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts receivable</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>106</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>43</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Income taxes</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(500</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,192</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Inventories</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4,282</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,636</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Prepaid expenses and other current assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(481</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(516</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other assets</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(75</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounts payable and accrued expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,254</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,534</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Other liabilities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,312</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,765</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net cash provided by operating activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10,823</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,179</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash flows from investing activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Purchases of property and equipment</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5,494</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,725</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net cash used in investing activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5,494</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,725</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash flows from financing activities</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Principal payments on long-term debt</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(6,732</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,750</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net cash used in financing activities</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(6,732</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2,750</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net decrease in cash and cash equivalents</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1,403</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3,296</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2><B>Cash and cash equivalents</B></FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Beginning of year</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,226</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>4,002</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>End of period</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5,823</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>706</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The accompanying notes are an integral part of these unaudited consolidated financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-29</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="fy78401_body_central_corp._notes_to_un__bod02847"> </A>
<A NAME="toc_fy78401_1"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B><BR>  BODY CENTRAL CORP.    <BR>    <BR>    NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Nature of Business  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Body Central Corp. (the "Company"), formerly known as Body Central Acquisition Corp., is a specialty retailer of young women's apparel and
accessories operating retail stores in the South, Mid-Atlantic and Midwest regions of the United States. In addition, the Company operates a direct business through its
e-commerce website, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>www.bodyc.com</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, and Body Central catalog. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Stock Split  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On October&nbsp;13, 2010, a 25.40446-for-1 stock split of the Company's outstanding Common Stock was implemented in
conjunction with the Company's initial public offering ("IPO"). All Common Stock shares, per share data, and option exercise prices in the accompanying consolidated financial statements and notes to
the consolidated financial statements have been retroactively adjusted for all periods presented to give effect to the stock split. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Principles of Consolidation  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In the opinion of management, the accompanying Unaudited Consolidated Financial Statements include all adjustments, consisting of only normal
recurring adjustments, necessary for the fair statement of consolidated financial position, results of operations, and cash flows for the interim periods presented. All intercompany accounts and
transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally
accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, these Unaudited
Consolidated Financial Statements and related Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended January&nbsp;2, 2010,
included in the Company's Registration Statement on Form&nbsp;S-1 (File No.&nbsp;333-168014), as amended ("Registration Statement"), filed with the SEC. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Fiscal Year End  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The Company's fiscal year ends on the Saturday closest to December&nbsp;31. As used herein, the interim periods presented are the
thirty-nine week periods ended October&nbsp;2, 2010 and October&nbsp;3, 2009, respectively. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Use of Estimates  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. On an ongoing basis, management evaluates its estimates and judgments, including those related to inventory valuation, property and equipment,
recoverability of long-lived assets, including intangible assets, income taxes and stock-based compensation. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-30</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
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<A NAME="page_fy78401_1_31"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Segment Reporting  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>GAAP has established guidance for reporting information about a company's operating segments, including disclosures related to a company's products
and services, geographic areas and major customers. The Company has aggregated its net revenues generated from its retail stores and its direct business into one operating segment. The Company
aggregates its operating segments because they have a similar class of customer, nature of products, nature of production process and distribution methods as well as similar economic characteristics.
The Company has no international sales. All of the Company's identifiable assets are in the United States. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Inventories  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Inventories are comprised principally of women's apparel and accessories and are stated at the lower of cost or market, on a
first-in-first-out basis, using the retail inventory method. Included in the carrying value of merchandise inventory, and reflected in cost of goods sold, is a
reserve for shrinkage which is accrued between physical inventory dates as a percentage of sales based on historical inventory results. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear this merchandise. The Company records a markdown reserve based on
estimated future markdowns related to current inventory to clear slow-moving inventory. These markdowns may have an adverse impact on earnings, depending on the extent and amount of
inventory affected. The markdown reserve is recorded as an increase to cost of goods sold in the Consolidated Statements of Operations. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> New Accounting Standards  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In August 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2009-05, </FONT> <FONT COLOR="#3B5A6F" SIZE=2><I>Measuring Liabilities at Fair Value (Topic 820)
</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. The objective of the new guidance is to provide clarification for the fair value measurement of
liabilities, specifically providing clarification that in circumstances in which a quoted price in an active market for an identical liability is not available, a reporting entity is required to
measure fair value using certain prescribed techniques. Techniques highlighted include using 1)&nbsp;the quoted price of the identical liability when traded as an asset, 2)&nbsp;quoted prices for
similar liabilities or similar liabilities when traded as assets or 3)&nbsp;another valuation technique that is consistent with the principles of fair value measurements. The new guidance also
clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction
that prevents the transfer of the liability. Finally, the guidance clarifies that Level&nbsp;1 fair value measurements include both a quoted price in an active market for the identical liability and
a quoted price for the identical liability when traded as an asset in an active market when no adjustment to the quoted price of the asset is required. The Company's adoption of this guidance did not
have a material impact on its financial statements or disclosures. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>In
January 2010, the FASB issued ASU 2010-06, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>. The new guidance requires disclosures of transfers in and out of Level&nbsp;1 and 2 fair value measurements, including a description of the reason for the
transfer. The new guidance also calls for disclosures about the activity in Level&nbsp;3 measurements by separately presenting information on purchases, sales, issuances and settlements on a gross
basis rather </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-31</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 1. Nature of Business and Summary of Significant Accounting Policies (Continued) </B></FONT></P>

<BR>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>than
a single net number. The guidance also clarifies 1)&nbsp;the level of disaggregation that should be used in completing disclosures about fair value measurements and 2)&nbsp;the disclosures
required in describing the inputs and valuation techniques used for both nonrecurring and recurring fair value measurements. This guidance is effective for interim and annual reporting periods
beginning after December&nbsp;15, 2009, except for the new disclosures regarding the activity in Level&nbsp;3 measurements, which became effective for fiscal years beginning after
December&nbsp;15, 2010. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> Reclassification  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>A reclassification has been made to the thirty-nine weeks ended October&nbsp;3, 2009 Consolidated Financial Statements in order to
conform to the presentation for the thirty-nine weeks ended October&nbsp;2, 2010. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 2. Financial Instruments  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The FASB-issued guidance establishes a framework for measuring fair value that is based on the inputs market participants use to determine fair value of an asset or liability and
establishes a fair value hierarchy to prioritize those inputs. The guidance under this statement describes a hierarchy of three levels of input that may be used to measure fair
value: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Level&nbsp;1&nbsp;&#151; Inputs based on quoted prices in active markets for identical assets and liabilities. </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Level&nbsp;2&nbsp;&#151; Inputs other than Level&nbsp;1 quoted prices, such as quoted prices for similar
assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset
or liability.  </FONT> <FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Level&nbsp;3&nbsp;&#151; Unobservable inputs based on little market or no market activity and which are
significant to the fair value of the assets and liabilities. </FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company's material financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The fair values of cash, accounts receivable,
accounts payable and accrued expenses are equal to their carrying values based on their liquidity. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Considerable
judgment is required in interpreting market data to develop estimates of fair value. The fair value estimate presented herein is not necessarily indicative of the amount that the Company
or
the debt holders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair value. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>As
more fully described in Note&nbsp;7, on October&nbsp;20, 2010, the Company repaid all amounts owed under the term loan facilities of its senior credit facility using proceeds from its initial
public offering ("IPO"). The term loans were repaid at carrying value. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-32</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 2. Financial Instruments (Continued) </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company has determined the estimated fair value amounts of its financial instruments using available market information. The assets that are measured at fair value on a recurring basis include the
following: </FONT></P>
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<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="42pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="58pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="65pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="79pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fair Value Measurements Using </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Total </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Quoted<BR>
Prices in<BR>
Active<BR>
Markets<BR>
(Level&nbsp;1) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Other<BR>
Observable<BR>
Inputs<BR>
(Level&nbsp;2) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Significant<BR>
Unobservable<BR>
Inputs<BR>
(Level&nbsp;3) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Money market securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>October&nbsp;2, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,754</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,754</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>January&nbsp;2, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,653</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>2,653</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>October&nbsp;3, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Money market securities, which are short-term investments of excess cash, are classified as cash and cash equivalents on the Consolidated Balance
Sheets. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 3. Leases  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company conducts all of its retail sales and corporate operations in leased facilities. Lease terms generally range up to ten years and provide for escalations in base rents. The Company does not
have obligations to renew the leases. Certain leases provide for contingent rentals based upon sales. Many leases also require additional payments covering real estate taxes, common area costs and
insurance. Future minimum rental commitments, by fiscal year and in the aggregate, under noncancelable operating leases as of October&nbsp;2, 2010, are as follows. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="83pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:48pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Fiscal Year

<!-- COMMAND=ADD_SCROPPEDRULE,48pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands) </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2010 Remaining</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>3,835</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>13,802</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10,902</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8,911</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>8,123</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Thereafter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>19,463</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>65,036</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 4. Income Taxes  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for discrete events occurring in a particular period. The effective income
tax rate was 37.6% and 37.1% for the thirty-nine weeks ended October&nbsp;2, 2010 and October&nbsp;3,
2009, respectively. The effective rates for the thirty-nine weeks ended October&nbsp;2, 2010 are higher primarily due to reduced tax credits expected to be utilized to reduce the
Company's fiscal year 2010 income tax liability. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-33</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
<P style='font-family:times;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=162,EFW="2201633",CP="BODY CENTRAL ACQUISITION CORP.",DN="1",CHK=1029972,FOLIO='F-33',FILE='DISK135:[11ZAK1.11ZAK78401]FY78401A.;8',USER='MSULLIV',CD='27-JAN-2011;08:34' -->
<A NAME="page_fy78401_1_34"> </A>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 4. Income Taxes (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with FASB ASC 740, </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>Income Taxes</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>, guidance related to
uncertain tax positions, and adjusts these liabilities when its judgment changes as the result of the evaluation of new information. The Company does not anticipate any significant changes to the
unrecognized tax benefits recorded at the balance sheet date within the next twelve months. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 5. Related Parties  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
The Company leases office and warehouse space under a noncancelable lease agreement dated October&nbsp;1, 2006 with a company that is owned in part by two stockholders of the Company, both of whom
are directors of the Company and one of whom is also a member of management of the Company. The lease expires on October&nbsp;1, 2016. The Company incurred rent expense of $351,000 and $346,000 for
the thirty-nine weeks ended October&nbsp;3, 2009 and October&nbsp;2, 2010, respectively, related to this lease. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 6. Earnings per Common Share  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
Basic earnings per common share are calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per
common share includes the determinants of basic earnings per common share plus the additional dilution for all potentially dilutive stock options and convertible securities utilizing the treasury
stock method and if-converted method, respectively. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
following table shows the amounts used in computing earnings per share and the effect on net income and the weighted average number of shares potentially dilutive to Common Stock: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="18pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="74pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Thirty-Nine Weeks Ended </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;2, 2010 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>October&nbsp;3, 2009 </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(in thousands, except share and per share data)</B></FONT><BR></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net income as reported</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>7,063</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,304</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Less: Preferred stock dividends declared</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(113</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(113</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Net income attributable to common shareholders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>6,950</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1,191</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted average basic common shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
203,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
203,235</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Impact of dilutive securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Stock options</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>375,067</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>85,240</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Convertible securities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,869,109</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,869,109</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Weighted average dilutive common shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,447,411</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,157,584</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Per common share:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Basic income per common share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>34.20</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>5.86</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Diluted income per common share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.57</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>0.11</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-34</FONT></P>

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<A NAME="page_fy78401_1_35"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
HREF="#bg78401a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B><BR>
BODY CENTRAL CORP. </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 6. Earnings per Common Share (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Stock options to purchase 167,669 shares of Common Stock for the thirty-nine weeks ended October&nbsp;3, 2009, were outstanding, but were not
included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> 7. Subsequent Events  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>
On October&nbsp;13, 2010, the Company amended its authorized capital stock to 150,000,000 shares of Common Stock, par value $0.001 per share, and 5,000,000 shares of undesignated preferred stock,
par value $0.001 per share. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;14, 2010, the Company completed the IPO of its Common Stock which included 3,333,333 new shares sold by the Company and 1,666,667 shares sold by the Company's existing shareholders,
raising net proceeds of $40.3&nbsp;million for the Company, after deducting the underwriting discount. As part of its IPO, the Company's convertible Series&nbsp;A and Series&nbsp;B Preferred
Stock were converted to 11,869,109 shares of its Common Stock. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
October&nbsp;20, 2010, using net proceeds from its IPO, the Company repaid all amounts owing under its term loan facilities of its senior credit facility, redeemed all its
non-convertible, non-voting Series&nbsp;C preferred stock, and paid its transaction bonus plan in which specified employees, including named executive officers, received an
aggregate $1.0&nbsp;million triggered by the completion of the IPO. There were no amounts outstanding under the revolving credit facility of the Company's senior credit facility at the time of
repayment. Subsequently, the senior credit facility was terminated. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
November&nbsp;2, 2010, the underwriters closed on the full exercise of their over-allotment option granted in connection with the Company's IPO to purchase an additional 750,000
shares of the Company's Common Stock from the Company's selling stockholders. The Company did not receive any proceeds from the sale of the over-allotment shares by the selling
stockholders. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>F-35</FONT></P>

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<IMG SRC="g931519.jpg" ALT="GRAPHIC" WIDTH="684" HEIGHT="891">
  </B></FONT></P>

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<A HREF="#bg78401a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=4><B>5,000,000 Shares  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B>BODY CENTRAL CORP.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=4><B>Common Stock  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=4><B>
<IMG SRC="g455410.jpg" ALT="BODY CENTRAL CORP. LOGO" WIDTH="288" HEIGHT="60">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=4><B>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=4><B> PROSPECTUS  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=4><B>


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 </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B>Piper Jaffray  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B> Jefferies  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B> Baird  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B> William Blair&nbsp;&amp; Company  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=5><B> Oppenheimer&nbsp;&amp;&nbsp;Co.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 </FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ja78401_part_ii_information_not_required_in_prospectus"> </A>
<A NAME="toc_ja78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  PART II    <BR>    <BR>    INFORMATION NOT REQUIRED IN PROSPECTUS    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ja78401_item_13._other_expenses_of_issuance_and_distribution"> </A>
<A NAME="toc_ja78401_2"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B>  Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT COLOR="#3B5A6F" SIZE=2><B><I>Other Expenses of Issuance and Distribution    <BR>    </I></B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The following table sets forth the fees and expenses, other than underwriting discounts and commissions, payable in connection with the registration
of the common stock hereunder. All amounts are estimates except the SEC registration fee and the FINRA filing fee. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:times;"><font size=1></FONT><FONT COLOR="#3B5A6F" SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:times;"></TD>
<TD WIDTH="" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:times;"></TD>
<TD WIDTH="56pt" style="font-family:times;"></TD>
<TD WIDTH="12pt" style="font-family:times;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Securities and Exchange Commission registration fee</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>11,983</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>FINRA filing fee</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>12,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Accounting fees and expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>100,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Legal fees and expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>250,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Printing and engraving expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>100,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Miscellaneous expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>126,017</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:times;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>Total expenses</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>600,000</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:times;border-bottom:double #3B5A6F 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:times;">&nbsp;</TD>
</TR>
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 <P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1><A
NAME="ja78401_item_14._indemnification_of_directors_and_officers"> </A>
<A NAME="toc_ja78401_3"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B>  Item&nbsp;14.&nbsp;&nbsp;&nbsp;</B></FONT><FONT COLOR="#3B5A6F" SIZE=2><B><I>Indemnification of Directors and Officers    <BR>    </I></B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Section&nbsp;102 of the Delaware General Corporation Law permits a corporation in its certificate of incorporation or an amendment to eliminate or
limit the personal liability of its directors or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his or her duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of law or obtained an
improper personal benefit. Our certificate of incorporation provides that no director shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability, except to the extent that Delaware law prohibits the elimination or limitation of liability of directors for breaches of
fiduciary duty. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Section&nbsp;145
of the Delaware General Corporation Law provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons
serving at the request of the corporation in related capacities against expenses (including attorneys' fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the
person in connection with any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, other than an action by or in the right of the corporation, to which he or she is a party by reason of such position, if such person acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the
adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other
court shall deem proper. Section&nbsp;145(g) of the Delaware General Corporation Law further authorizes a corporation to purchase and maintain insurance on behalf of any indemnified person against
any liability asserted against and incurred by such person in any indemnified capacity, or arising out of such person's status as such, regardless of whether the corporation would otherwise have the
power to indemnify under Delaware law. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>II-1</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
certificate of incorporation provides that we must indemnify our directors and officers to the fullest extent authorized by Delaware law and may also pay expenses incurred in defending any such
proceeding in advance of its final disposition upon delivery of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately that
such person is not entitled to be indemnified under this section or otherwise. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Our
by-laws provide that it will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative by reason of the fact that he or she is or was, or has agreed to become, its director or officer, or is or was serving, or has agreed to serve, at its request
as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, an "indemnitee", or by reason of any
action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding and any appeal therefrom. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
have entered into indemnification agreements with our directors and executive officers. In general, these agreements provide that we will indemnify the director or executive officer to the fullest
extent permitted by law for claims arising in his or her capacity as a director or officer or in connection with his or her service at our request for another corporation or entity. We also maintain a
general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our certificate of
incorporation, our by-laws, agreement, vote of stockholders or disinterested directors or otherwise. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We
expect to maintain standard policies of insurance that provide coverage (1)&nbsp;to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful
act and (2)&nbsp;to us with respect to indemnification payments that we may make to such directors and officers. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the
registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ja78401_item_15._recent_sales_of_unregistered_securities"> </A>
<A NAME="toc_ja78401_4"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B>  Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT COLOR="#3B5A6F" SIZE=2><B><I>Recent Sales of Unregistered Securities    <BR>    </I></B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Set forth below is information regarding shares of common stock and preferred stock issued and options granted by us within the past three years that
were not registered under the Securities Act. Also included is the consideration, if any, received by us for such shares and options and information relating to the section of the Securities Act, or
rule of the SEC, under which exemption from registration was claimed. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> (a)&nbsp;&nbsp;&nbsp;&nbsp;Issuances of Capital Stock  </I></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(1)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Common
Stock </FONT></DD></DL>
<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>None. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>(2)</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Preferred
Stock </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>II-2</FONT></P>

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<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>On
March&nbsp;16, 2007, we sold an aggregate of 30,000 shares of non-convertible, non-voting Series&nbsp;C preferred stock to certain buyers of the Series&nbsp;C
preferred stock at a price per share of $100 for an aggregate purchase price of $3.0&nbsp;million. The purchase price was paid by the investors from the escrow account securing certain
indemnification obligations of the investors arising from our 2006 Transaction. This transaction took place following a payment to the investors of $81.2&nbsp;million by us for the purchase of the
remaining shares of Body Shop of America,&nbsp;Inc. and Catalogue Ventures,&nbsp;Inc. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I> (b)&nbsp;&nbsp;&nbsp;&nbsp;Stock Option Grants  </I></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1)&nbsp;&nbsp;On
August&nbsp;15, 2007, we granted a stock option to purchase 134,135 shares of our common stock at an exercise price of $3.94 per share to one of our employees pursuant to our
2006 Equity Incentive Plan. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2)&nbsp;&nbsp;On
December&nbsp;5, 2007, we granted a stock option to purchase 33,534 shares of our common stock at an exercise price of $3.94 per share to one of our employees pursuant to our
2006 Equity Incentive Plan. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(3)&nbsp;&nbsp;On
February&nbsp;7, 2008, we granted stock options to purchase an aggregate 209,587 shares of our common stock at an exercise price of $0.98 per share to certain employees pursuant
to our 2006 Equity Incentive Plan. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(4)&nbsp;&nbsp;On
October&nbsp;12, 2009, we granted stock options to purchase an aggregate 586,843 shares of our common stock at an exercise price of $3.94 per share to certain employees pursuant
to our 2006 Equity Incentive Plan. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(5)&nbsp;&nbsp;On
October&nbsp;14, 2010, we granted options to certain of our employees and non-employee directors to purchase an aggregate of 130,000 shares of common stock with an
exercise price equal to $13.00 per share. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Options
to purchase shares of our common stock pursuant to our 2006 Equity Incentive Plan generally vest 25% on the first anniversary of the grant or on the first anniversary of an employee's date of
employment, with the remainder vesting in 12 equal quarterly installments thereafter. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>No
underwriters were involved in the foregoing issuances of securities. The offers, sales and issuances of the securities described above were deemed to be exempt from registration under the
Securities Act in reliance upon Rule&nbsp;701 of the Securities Act or Section&nbsp;4(2) of the Securities Act. The offers, sales and issuances of the securities that were deemed to be exempt in
reliance on Rule&nbsp;701 were transactions under compensatory benefit plans and contracts relating to compensation as provided under Rule&nbsp;701. The offers, sales and issuances of the
securities that were deemed to be exempt in reliance upon Section&nbsp;4(2) were each transactions not involving any public offering, and all recipients of these securities were accredited investors
within the meaning of Rule&nbsp;501 of Regulation&nbsp;D of the Securities Act who were acquiring the applicable securities for investment and not distribution and had represented that they could
bear the risks of the investment. Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships, to information about us. </FONT></P>

<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>II-3</FONT></P>

<HR NOSHADE COLOR="#3B5A6F">
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<A NAME="page_ja78401_1_4"> </A>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ja78401_item_16._exhibits_and_financial_statement_schedules"> </A>
<A NAME="toc_ja78401_5"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B>  Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Financial Statement Schedules    <BR>    </B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The exhibits to the registration statement are listed in the Exhibit Index to this registration statement and are incorporated by reference herein. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B>(b)&nbsp;&nbsp;Financial Statement Schedules  </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Schedules not listed have been omitted because the information required to be set forth therein is not applicable, not material or is shown in the financial statements or notes
thereto.  </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="ja78401_item_17._undertakings."> </A>
<A NAME="toc_ja78401_6"> </A></FONT> <FONT COLOR="#3B5A6F" SIZE=2><B>  Item&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT COLOR="#3B5A6F" SIZE=2><B><I>Undertakings.    <BR>    </I></B></FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in
such denomination and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>The
undersigned Registrant hereby undertakes that: </FONT></P>

<UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(1)&nbsp;&nbsp;For
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon
Rule&nbsp;430A and contained in the form of prospectus filed by the registrant pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective. </FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>(2)&nbsp;&nbsp;For
purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>bona
fide</I></FONT><FONT COLOR="#3B5A6F" SIZE=2> offering thereof. </FONT></P>

</UL>
<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>II-4</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="jc78401_signatures"> </A>
<A NAME="toc_jc78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  SIGNATURES    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement on Form&nbsp;S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Jacksonville, State of Florida, on the 27th&nbsp;day of January 2011. </FONT></P>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><B> BODY CENTRAL CORP.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>By:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><p align=left style="font-family:times;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;B. ALLEN WEINSTEIN<BR>



<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT>
 </TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:times;"><p style="font-family:times;margin-left:10pt;text-indent:-10pt;"><FONT COLOR="#3B5A6F" SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Name: B. Allen Weinstein<BR>
Title: </FONT><FONT COLOR="#3B5A6F" SIZE=2><I>President, Chief Executive Officer and Director</I></FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>II-5</FONT></P>

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<P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><A
NAME="jc78401_signatures_and_power_of_attorney_1"> </A>
<A NAME="toc_jc78401_2"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  SIGNATURES AND POWER OF ATTORNEY    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>We, the undersigned officers and directors of Body Central Corp., hereby severally constitute and appoint B. Allen Weinstein and Richard L. Walters,
and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in
each of them for him and in his name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement,
and any other registration statement for the same offering pursuant to Rule&nbsp;462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. </FONT></P>


<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities held on the dates indicated. </FONT></P>
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<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
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 </B></FONT></DIV></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:times;"><DIV style="border-bottom:solid #3B5A6F 1.0pt;margin-bottom:0pt;width:17pt;"><FONT COLOR="#3B5A6F" SIZE=1><B>Date

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 </B></FONT></DIV></TH>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>
&nbsp;</FONT></TD>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;B. ALLEN WEINSTEIN<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> B. Allen Weinstein</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>President, Chief Executive Officer and Director (Principal Executive Officer)</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;RICHARD L. WALTERS<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> Richard L. Walters</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;BETH R. ANGELO<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> Beth R. Angelo</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Chief Merchandising Officer, Executive Vice President, President of Direct Sales and Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;MARTIN P. DOOLAN<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> Martin P. Doolan</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;SCOTT M. GALLIN<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> Scott M. Gallin</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;JOHN K. HALEY<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> John K. Haley</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;JERROLD S. ROSENBAUM<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> Jerrold S. Rosenbaum</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;JOHN H. TURNER<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> John H. Turner</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>/s/&nbsp;CARLO A. VON SCHROETER<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#3B5A6F">

</FONT> <FONT COLOR="#3B5A6F" SIZE=2> Carlo A. von Schroeter</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>January 27, 2011</FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>II-6</FONT></P>

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NAME="ka78401_exhibit_index"> </A>
<A NAME="toc_ka78401_1"> </A>
<BR></FONT><FONT COLOR="#3B5A6F" SIZE=2><B>  EXHIBIT INDEX    <BR>    </B></FONT></P>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>In reviewing the agreements included as exhibits to this registration statement, please remember they are included to provide
you with information regarding their terms and are not intended to provide any other factual or disclosure information about us, our subsidiaries or other parties to the agreements. The agreements
contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the
applicable agreement and:</I></FONT></P>

<UL>
<DL compact>
<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>should not in all instances be treated as categorical statements of fact, but rather as a way of
allocating the risk to one of the parties if those statements prove to be inaccurate;</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>have been qualified by disclosures that were made to the other party in connection with the
negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>may apply standards of materiality in a way that is different from what may be viewed as material
to you or other investors; and</I></FONT><FONT COLOR="#3B5A6F" SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=2>&#149;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>were made only as of the date of the applicable agreement or such other date or dates as may be
specified in the agreement and are subject to more recent developments.</I></FONT></DD></DL>
</UL>

<P style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><I>Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. We acknowledge that,
notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual
provisions are required to make the statements in this registration statement not misleading. Additional information about us may be found elsewhere in the prospectus included in this registration
statement.</I></FONT></P>
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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Exhibit No. </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Description </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>1.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Form of Underwriting Agreement.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>3.1****</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Third Amended and Restated Certificate of Incorporation of Body Central Corp.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>3.2****</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Amended and Restated By-Laws of Body Central Corp.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>4.1****</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Form of Registrant's Common Stock Certificate.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>4.2*</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Registration Rights Agreement, dated October&nbsp;1, 2006, between Body Central Acquisition Corp. and certain investors named therein.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>5.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Opinion of Foley &amp; Lardner&nbsp;LLP.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.1****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Amended and Restated 2006 Equity Incentive Plan.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.2****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Form of Incentive Stock Option Agreement under the Amended and Restated 2006 Equity Incentive Plan.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.3****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Form of Non-Qualified Stock Option Agreement under the Amended and Restated 2006 Equity Incentive Plan.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.4****</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Form of Indemnification Agreement made by and between Body Central Corp. and each of its directors and executive officers.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.5**</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Lease Agreement, dated as of October&nbsp;1, 2006, between Powers Avenue Joint Venture and Body Shop of America,&nbsp;Inc.</FONT></TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>II-7</FONT></P>

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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Exhibit No. </B></FONT></TH>
<TH style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:times;border-bottom:solid #3B5A6F 1.0pt;"><FONT COLOR="#3B5A6F" SIZE=2><B>Description </B></FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>10.6**&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2>Incentive Stock Option Agreement, dated October&nbsp;12, 2009, between Body Central Acquisition Corp. and B. Allen Weinstein.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.7**&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Incentive Stock Option Agreement, dated February&nbsp;7, 2008, between Body Central Acquisition Corp. and Richard L. Walters.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.8**&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Incentive Stock Option Agreement, dated August&nbsp;15, 2007, between Body Central Acquisition Corp. and Richard L. Walters.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.9**&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Incentive Stock Option Agreement, dated October&nbsp;12, 2009, between Body Central Acquisition Corp. and Beth Angelo.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.10**&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Incentive Stock Option Agreement, dated February&nbsp;7, 2008, between Body Central Acquisition Corp. and Beth Angelo.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.11****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Employment Agreement dated November&nbsp;27, 2007, among Body Shop of America, Inc., Catalogue Ventures, Inc. and Richard L. Walters.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.12&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Amendment No.&nbsp;1 to Employment Agreement dated November&nbsp;27, 2007, among Body Shop of America,&nbsp;Inc., Catalogue Ventures,&nbsp;Inc. and Richard&nbsp;L. Walters.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.13****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Form of Employment Agreement between Body Central Acquisition Corp. and Beth&nbsp;Angelo.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.14****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Employment Agreement, dated July&nbsp;8, 2009, among Body Central Acquisition Corp., Body Shop of America, Inc., Catalogue Ventures, Inc. and B. Allen Weinstein.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.15****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Amended and Restated Employment Agreement among Body Shop of America, Inc., Catalogue Ventures, Inc. and Curtis Hill, dated December&nbsp;1, 2007, and Amendment No.&nbsp;1 to Amended and Restated
Employment Agreement, dated February&nbsp;23, 2009.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.16*****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Form of Letter Agreement between Body Central Acquisition Corp. and Martin&nbsp;Doolan.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.17****&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Form of Letter Agreement between Body Central Acquisition Corp. and Jerrold&nbsp;Rosenbaum.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>10.18**&#134;</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Success Bonus Plan.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>14.1****</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Code of Business Conduct and Ethics.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>21.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>List of Subsidiaries.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>23.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Consent of Foley &amp; Lardner&nbsp;LLP (included in Exhibit&nbsp;5.1).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>23.2</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Consent of PricewaterhouseCoopers,&nbsp;LLP, independent registered certified public accounting firm.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>24.1</FONT></TD>
<TD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:times;"><BR><FONT COLOR="#3B5A6F" SIZE=2>Power of Attorney (included on signature page).</FONT></TD>
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<DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>*</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Previously
filed with the initial Registration Statement (Registration No.&nbsp;333-168014) on Form&nbsp;S-1 filed on July&nbsp;7, 2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>**</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Previously
filed with Amendment No.&nbsp;1 to the Registration Statement (Registration No.&nbsp;333-168014) on Form&nbsp;S-1 filed on August&nbsp;17,
2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>***</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Previously
filed with Amendment No.&nbsp;2 to the Registration Statement (Registration No.&nbsp;333-168014) on Form S-1 filed on September&nbsp;14,
2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>****</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Previously
filed with Amendment No.&nbsp;3 to the Registration Statement (Registration No.&nbsp;333-168014) on Form&nbsp;S-1 filed on
September&nbsp;30, 2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>****</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Previously
filed with Amendment No.&nbsp;5 to the Registration Statement (Registration No.&nbsp;333-168014) on Form&nbsp;S-1 filed on
October&nbsp;13, 2010.
<BR><BR></FONT></DD><DT style='font-family:times;margin-bottom:-11pt;'><FONT COLOR="#3B5A6F" SIZE=1>&#134;</FONT></DT><DD style="font-family:times;"><FONT COLOR="#3B5A6F" SIZE=1>Indicates
a management contract or compensatory plan or arrangement. </FONT></DD></DL>
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{"company-data": {"conformed-name": "BODY CENTRAL CORP", "cik": "0001379246", "assigned-sic": "5600", "irs-number": "000000000"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-171898", "film-number": "11552313"}, "business-address": {"street1": "6225 POWERS AVENUE", "city": "JACKSONVILLE", "state": "FL", "zip": "32217", "phone": "904-737-0811"}, "mail-address": {"street1": "6225 POWERS AVENUE", "city": "JACKSONVILLE", "state": "FL", "zip": "32217"}, "former-company": {"former-conformed-name": "BODY CENTRAL ACQUISITION CORP", "date-changed": "20061026"}}
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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL INFORMATION
Table of Contents
As filed with the Securities and Exchange Commission on January 27, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BODY CENTRAL CORP.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
5600
(Primary Standard Industrial
Classification Code Number)
14-1972231
(I.R.S. Employer
Identification Number)
6225 Powers Avenue
Jacksonville, FL 32217
(904) 737-0811
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Julia B. Davis
General Counsel
6225 Powers Avenue
Jacksonville, Florida 32217
(904) 737-0811
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Michael B. Kirwan
John J. Wolfel, Jr.
Foley & Lardner LLP
One Independent Drive, Suite 1300
Jacksonville, Florida 32202
(904) 359-2000
William F. Schwitter, Esq.
Paul, Hastings, Janofsky & Walker LLP
75 East 55th Street
New York, New York 10022
Phone: (212) 318-6000
Approximate date of commencement of proposed sale to public:
As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box.
o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same offering.
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
ý
(Do not check if a
smaller reporting company)
Smaller reporting company
o
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered
Amount to be
Registered
(1)
Proposed Maximum
Offering Price
per Share
(2)
Proposed Maximum
Aggregate Offering
Price
(1)(2)
Amount of
Registration Fee
Common Stock, $0.001 par value per share
5,750,000
$17.95
$103,212,500
$11,982.97
(1)
Includes
750,000 shares of common stock that the underwriters may purchase pursuant to the over-allotment option to purchase
additional shares, if any.
(2)
Estimated
solely for the purpose of calculating the registration fee, based on the average of the high and low prices for the registrant's
common stock as reported on The NASDAQ Global Market on January 25, 2011, pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.
Table of Contents
The information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities
and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
Subject to completion, dated January 27, 2011
PROSPECTUS
5,000,000 Shares
Body Central Corp.
Common Stock
$         per share
•
Body Central Corp. is offering 100,000 shares and the selling stockholders are offering 4,900,000 shares. We will
not receive any proceeds from the sale of our shares by the selling stockholders.
•
We anticipate that the offering price will be between $         and
$         per share.
•
Our common stock is listed on The Nasdaq Global Market under the symbol BODY. On January 26, 2011 the closing price
of our common stock as reported on The NASDAQ Global Market was $18.02.
This investment involves risk. See "Risk Factors" beginning on page 12.
Per Share
Total
Public offering price
$
$
Underwriting discount
$
$
Proceeds, before expenses, to Body Central Corp.
$
$
Proceeds, before expenses, to selling stockholders
$
$
The underwriters have a 30-day option to purchase up to 750,000 additional shares of our common stock from the selling stockholders to cover
over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities commission has approved of anyone's investment in these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
The
shares will be ready for delivery on or
about                                    , 2011.
Joint Book-Running Managers
Piper Jaffray
Jefferies
Co-Managers
Baird
William Blair & Company
Oppenheimer & Co.
The date of this prospectus
is                               , 2011.
Table of Contents
TABLE OF CONTENTS
Page
Prospectus Summary
1
Risk Factors
12
Special Note Regarding Forward-Looking
Statements
31
Use of Proceeds
33
Market Price of Common Stock
33
Dividend Policy
33
Capitalization
34
Selected Consolidated Financial and Operating
Data
36
Management's Discussion and Analysis of Financial Condition
and Results of Operations
40
Business
62
Management
74
Executive Compensation
83
Certain Relationships and Related Party
Transactions
96
Principal and Selling Stockholders
100
Description of Capital Stock
102
Description of Certain Indebtedness
107
Shares Eligible for Future Sale
108
Certain Material U.S. Federal Income Tax Considerations to
Non-U.S. Holders
110
Underwriting
114
Legal Matters
121
Experts
121
Where You Can Find More Information
121
Index to Consolidated Financial Information
F-1
You
should rely only on the information contained in this prospectus or any free writing prospectus filed with the Securities and Exchange Commission. We have not, and the selling stockholders and
underwriters have not, authorized any other person to provide you with different information. Neither
this prospectus nor any free writing prospectus is an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted. The information in this
prospectus and any such free writing prospectus is complete and accurate as of the date on the front cover, regardless of its time of delivery or of any sale of shares of our common stock. The
information may have changed since that date.
Persons
who come into possession of this prospectus and any such free writing prospectus in jurisdictions outside the U.S. are required to inform themselves about and to observe any restrictions as to
this offering and the distribution of this prospectus and any such free writing prospectus applicable to that jurisdiction.
i
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Basis of Presentation
We operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the
Saturday closest to December 31st. The reporting periods contained in our audited financial statements included in this prospectus contain 52 weeks of operations in fiscal year 2009,
which ended January 2, 2010, 53 weeks of operations in fiscal year 2008, which ended January 3, 2009, and 52 weeks of operations in fiscal year 2007, which ended
December 29, 2007.
On
October 1, 2006, the acquisition by Body Central Corp. of all of the outstanding capital stock of Body Shop of America, Inc. and Catalogue Ventures, Inc. was completed. As a
result of this acquisition, Body Shop of America, Inc. and Catalogue Ventures, Inc. became our wholly owned subsidiaries. We generally refer to this acquisition and the related
transactions in this prospectus as the "2006 Transaction." On October 2, 2006, after the 2006 Transaction, we began a new basis of accounting. As a result of that change in our basis of
accounting, the 2006 financial reporting periods presented in this prospectus include the predecessor period of Body Central Corp. and its subsidiaries, reflecting approximately 39 weeks of operating
results of its now wholly owned subsidiaries from January 1, 2006 to October 1, 2006 and approximately 13 weeks of operating results for the successor period, from October 2, 2006
to December 30, 2006. Body Central Corp. had no assets, liabilities or operations prior to the 2006 Transaction and therefore the results for all periods prior to October 2, 2006 reflect
results of our predecessors. Due to the significance of the 2006 Transaction, the impact of purchase accounting and the change in our corporate structure that occurred in 2006, the financial
information for all successor periods is not comparable to that of the predecessor periods. As part of the 2006 Transaction, Body Central Corp. also acquired Rinzi Air, LLC, of which Body Shop
of America, Inc.
was the sole member. On March 6, 2008, Rinzi Air, LLC transferred its only asset to a third party and on October 20, 2010 we dissolved the entity.
Market and Industry Data
We obtained the industry, market and competitive position data throughout this prospectus from our own internal estimates and research as well as
from industry and general publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been prepared from
sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not
independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the definitions of our market and industry are appropriate,
neither this research nor these definitions have been verified by any independent source.
Trademarks
Body Central® and Lipstick® are our trademarks and are registered under applicable intellectual property laws. This
prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may
appear without the ® or
TM
symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our
rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies' trade names, trademarks or service marks to imply a
relationship with, or endorsement or sponsorship of us by, any other companies.
In
some regions of the U.S., our stores are located in the same malls and shopping centers as stores operated by a company doing business under the name The Body Shop®, which are cosmetics
and beauty stores. We are not affiliated with this company. In 1991, we granted this company a license to
ii
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use
our Body Shop trademark which is held by us in connection with retail store services for the sale of women's apparel and apparel accessories. Under the terms of this license agreement, we granted
an exclusive, royalty-free license to the cosmetics and beauty store company to use our "Body Shop" mark for its business as follows: as a service mark for mail order retail sales of
t-shirts and
sweatshirts in 49 states and territories and of other apparel in 38 states and territories; as a service mark for retail store sales of apparel in 38 states and territories; and as a trademark for
apparel in 38 states and territories. This license was non-exclusive as to certain uses and our agreements with this company permit us to continue to use our "Body Shop" mark in our stores located in
Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. We currently operate under the Body Central banner and, in a minority of
stores in certain states, we operate under the Body Shop banner. Our current business is focused on developing the Body Central and Lipstick brands and is moving away from the use of the Body Shop
name for our stores.
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Table of Contents
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the
information you should consider before investing in our common stock. You should read this entire prospectus carefully, especially the "Risk Factors" section of this prospectus and our consolidated
financial statements and related notes appearing at the end of this prospectus, before making an investment decision. Some of the statements in this prospectus constitute forward-looking statements.
See "Special Note Regarding Forward-Looking Statements" for more information.
We are a holding company and all of our business operations are conducted through our two wholly owned subsidiaries, Body Shop of America, Inc. and Catalogue
Ventures, Inc. Except where the context otherwise requires or where otherwise indicated, the terms "Body Central," "we," "us," "our," "our company" and "our business" refer to Body Central
Corp. and its subsidiaries, Body Shop of America, Inc. and Catalogue Ventures, Inc., as a combined entity.
Our Company
Founded in 1972, Body Central is a growing, multi-channel, specialty retailer offering on-trend, quality apparel and accessories at value prices. We
operate specialty apparel stores under the Body Central and Body Shop banners, as well as a direct business comprised of our Body Central catalog and our e-commerce website at
www.bodyc.com
. We target women in their late teens and twenties from diverse cultural backgrounds who seek the latest fashions and a flattering fit. Our
stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under our exclusive Body Central® and Lipstick® labels. We
continually update our merchandise and floor sets with an emphasis on coordinated outfits presented by lifestyle to give our customers a reason to shop our stores frequently.
We
believe our multi-channel strategy supports our brand building efforts and provides us with synergistic growth opportunities across all of our sales channels. As of January 1, 2011, we had
209 stores located in fashion retail venues across 23 states in the South, Mid-Atlantic and Midwest.
Our History and Recent Accomplishments
We opened our first Body Shop store in 1973 in Jacksonville, Florida, where our corporate headquarters is located. Our current business is focused on
opening Body Central stores and developing the Body Central and Lipstick brands and on moving away from the use of the Body Shop name for our stores. In October 2006, our founders, members of the
Rosenbaum family, sold a controlling interest in Body Central to a group of outside investors led by WestView Capital Partners, L.P. In October 2010, we completed our initial public offering and our
common stock was listed on The Nasdaq Global Market under the symbol BODY. In recent years, we have completed numerous initiatives that have strengthened our business and positioned us for future
growth, including:
•
Enhanced Executive Team.
We hired a number of executives who
have focused on changes to improve our business, including capitalizing on our competitive advantages, increasing operational discipline, reestablishing the merchandising strategy that was core to our
historical success, expanding our marketing and merchandising teams and enhancing our financial capabilities.
•
Flexible Test-and-Reorder Business
Model.
In early 2008, we returned to our proven test-and-reorder strategy, which combined with short lead times enables us to react quickly
to the latest fashion trends. Our extensive vendor base provides us with access to a large
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number
of designers and enables us to have the best selling products in our stores in a timely fashion. This model allows us to maximize full-price sales and reduce our inventory risk.
•
Refined Real Estate Model.
In 2008, we enhanced our real
estate model by introducing additional structure and analysis to our site selection process. We adhere to our selection methodology and do not pursue expansion opportunities if they do not meet all of
our new store financial and site criteria. Since 2008, our average new store performance outpaced the targeted returns in our store economic model.
Through
initiatives implemented by our executive team since 2008, we have delivered strong results despite the difficult economic environment. For instance, we have:
•
maintained positive comparable stores sales growth over the past nine quarters, through the fourth quarter of 2010,
including an increase of 4.9% for fiscal year 2009 and 14.8% for the thirty-nine weeks ended October 2, 2010;
•
opened six stores in fiscal year 2008, 15 stores in fiscal year 2009 and 27 stores in fiscal year 2010 and from fiscal
2008 through January 1, 2011, we also closed 27 stores, most of which were underperforming, for a net increase of 21 stores;
•
increased inventory turnover resulting in a meaningful reduction in markdowns and an improvement in gross margin by
approximately 190 basis points between fiscal year 2008 and fiscal year 2009;
•
improved operating margin by approximately 300 basis points between fiscal year 2008 and fiscal year 2009, primarily as a
result of reduced labor and occupancy costs, resulting in an increase in income from operations to $8.2 million for fiscal year 2009 from $2.0 million for fiscal year 2008; and
•
increased our net income by $3.7 million to $2.8 million for fiscal year 2009 from a loss of $952,000 in
fiscal year 2008, and by $5.8 million to $7.1 million for the thirty-nine weeks ended October 2, 2010, from $1.3 million in the thirty-nine weeks ended October 3,
2009.
Our Strengths
We believe that the following strengths are critical to our continued success:
•
Established and Differentiated Brand.
With over
35 years of operating experience, we have built the Body Central brand around our key strategy of providing the right fashion and quality, with a flattering fit, at a value price. We believe
our core customer is passionate about finding current fashions typically offered in higher-end specialty stores and boutiques at value prices in an exciting store environment.
•
Exciting Fashion Delivered at a Compelling Value.
We deliver
a carefully edited selection of quality, fashionable apparel and accessories for most occasions at value prices. Our broad product assortment of apparel, jewelry, accessories and footwear allows our
customers to purchase complete outfits. We do not dictate fashion trends, but respond quickly to offer best selling styles. We believe that by delivering new merchandise to our
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stores
every day and by updating our floor sets regularly, we are able to drive repeat store visits.
•
Multiple Sales Channel Synergies.
We complement our retail
stores with a successful direct business, which consists of catalog and e-commerce sales. Our direct business represented approximately 16.8% of our net revenues in fiscal year 2009. We
believe our multi-channel strategy builds brand awareness and drives sales across all of our channels.
•
Powerful New Store Economics.
We have a proven store economic
model that works across a variety of market sizes, demographics, climates, real estate venues and mall classifications. Our flexible store format allows us to adapt to available locations and store
footprints quickly with a low investment cost. On average, our new stores are paying back our investment in less than one year based on net operating cash flows for that store and inclusive of lease
commitments.
•
Disciplined Inventory Management.
We test the vast majority
of all new merchandise on a limited basis prior to a broader roll out. Our proven test-and-reorder strategy serves as the foundation of our merchandising philosophy and
instills discipline in our inventory management. This strategy, together with our vendors' short production lead times, allows us to respond rapidly to changing trends with appropriate merchandise
levels, thereby minimizing markdowns and inventory risk.
•
Proven Management Team.
We are led by a proven executive
team. Allen Weinstein, our President and Chief Executive Officer, Beth Angelo, our Chief Merchandising Officer and President of Direct Sales, and Richard Walters, our Chief Financial Officer, lead a
management team that has significant experience in the retail industry, including design, marketing, sourcing, merchandising and real estate. In addition, our regional and district managers average
over 20 and 10 years of experience, respectively.
Growth Strategy
We believe we are well positioned to take advantage of opportunities to increase revenues, drive net income growth and capture market share
including:
•
Expand Our Store Base.
With only 209 stores in 23 states as
of January 1, 2011, we have considerable room to continue to expand in existing and adjacent markets. We opened 27 new stores in fiscal year 2010. We expect to open approximately 30 to 35 new
stores in fiscal year 2011. We believe we can continue to open new stores at an annual rate of 15% for the next several years.
•
Increase Comparable Store Sales and Enhance Brand
Awareness.
We expect to continue to drive our comparable store sales by keeping our merchandise on-trend, increasing the number of customer
transactions, continuing to provide our distinctive in-store experience and increasing our brand awareness. We believe our ability to test products quickly and to rapidly replenish the
best selling items keeps our shopping experience exciting and drives repeat customer visits.
•
Expand Operating Margin.
As we grow, we believe we can
improve our operating margin by continuing to leverage our infrastructure and buying power, carefully reviewing
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our
expenses and processes, refining our inventory disciplines, upgrading our information technology and further improving our store operations and labor productivity.
•
Grow Our Direct Business.
In July 2010, we implemented a new
software system for our direct business. This new system is expected to enhance the potential for growth in our direct business by allowing us to process more orders, offer a more dynamic merchandise
presentation on our website and enhance our marketing efforts by including, among other things, the ability to target specific customer groups.
Recent Developments
The information presented below for the thirteen weeks ended January 1, 2011 is estimated based upon currently available information and is
subject to change. Management has prepared the estimated net revenue, comparable store sales and earnings per share data below in good faith based upon our internal reporting for the thirteen weeks
ended January 1, 2011. The information presented below was estimated using significant assumptions, including, among other
things, historical sales return information and inventory valuation data. The estimates represent the most current information available to management since our normal financial closing and financial
statement preparation processes have not been completed and year-end adjustments may occur. As a result, our actual financial results could be different and those differences could be material. The
audit of the fiscal year 2010 consolidated financial statements by our independent registered public accounting firm has not yet been completed. As such, the results are subject to change. However, in
the opinion of management, any adjustments are expected to be of a normal and recurring nature, necessary for a fair presentation of the information presented below. Our consolidated financial
statements for fiscal year 2010 are not expected to be filed with the Securities and Exchange Commission, or the SEC, until after this offering is completed.
Net
revenue for the fourth quarter of fiscal 2010 increased 26% to $67.2 million compared to $53.2 million for the fourth quarter of last year. Comparable store sales increased 15% for
the fourth quarter of 2010 compared to an increase of 7% in the fourth quarter of 2009.
We
expect diluted earnings per share to be in the range of $0.17 to $0.18 for the fourth quarter of fiscal 2010. We expect net income to be between $2.6 million and $2.8 million for the
fourth quarter of fiscal 2010 compared to the fourth quarter of fiscal 2009, where we reported net income of $1.5 million.
Excluding
the non-recurring portion of public company expenses relating to our initial public offering, estimated to be $1.2 million, as well as one-time costs related
to the early repayment of debt of $793,000, diluted earnings per share for the fourth quarter of fiscal 2010 are expected to be in the range of $0.25 to $0.26 and net income is expected to range
between $3.9 million and $4.1 million.
Although
at this time we are unable to provide any additional estimates with respect to our financial position, we have not identified any unusual or unique events or trends that occurred during the
thirteen weeks ended January 1, 2011 which might materially affect our results of operations. The final financial results for the thirteen weeks ended January 1, 2011 may be different
from the preliminary estimates we are providing above due to completion of our normal quarterly financial close and review procedures and final adjustments.
The
preliminary financial data included above has been prepared by, and is the responsibility of, our management. PricewaterhouseCoopers LLP has not audited, reviewed, compiled or performed any
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procedures
with respect to the accompanying preliminary financial data. Accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto.
Our Core Information Systems
In the fourth quarter of fiscal 2010, we completed the installation of a new upgraded point-of-sale software system with an
off-the-shelf application from a specialty retail store system vendor in all of our stores. We began installing this software in our stores in the third quarter of fiscal 2010.
We believe this new point-of-sale software, combined with our key new systems which support our direct business, which were installed in July 2010, will increase the synergies
between our direct business and our retail stores. To maximize the benefits from these upgrades, we have determined that it will be beneficial to us to continue to invest in our systems so that we are
in a better position to augment our in-store and direct businesses. We expect to spend approximately $375,000 in the first quarter of 2011 as an incremental expenditure to our previous
budget. These additional expenses are primarily related to enhancing the functionality of our recently upgraded systems which support our direct business and point-of-sale
software system. We expect this investment will improve both customer service and our operational efficiency, in addition to enhancing the ability of these systems to interface with our underlying
systems. This additional expenditure is not expected to have an impact on our ability to meet our operating budget for fiscal 2011.
Summary Risk Factors
We are subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business,
financial condition, results of operations, cash flows and prospects. You should carefully consider these risks, including all of the risks discussed in the section entitled "Risk Factors," beginning
on page 12 of this prospectus, before investing in our common stock. Risks relating to our business include, among others:
•
we may not be able to effectively anticipate, identify and respond quickly to changing fashion trends and customer
preferences;
•
we may not be able to execute our growth strategy if we are unable to identify suitable locations to open new stores,
obtain favorable lease terms, attract customers to our stores, hire and retain personnel, maintain sufficient levels of cash flow to support our expansion and/or grow our direct business;
•
we may be adversely impacted by economic conditions, the seasonality of our business and the success of the malls and
shopping centers where our stores are located;
•
we operate in a highly competitive specialty retail apparel industry and may face increased competition;
•
we may not be able to maintain or improve levels of comparable store sales;
•
we may not be able to maintain and enhance our brand image;
•
we may face disruptions in our information systems;
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•
we may not be able to effectively manage our operations, which have grown rapidly, or our future growth;
and
•
we may lose key personnel.
Our Principal Stockholders
Upon the completion of this offering, WestView Capital Partners L.P., or WestView, entities advised by PineBridge Investments, or PineBridge,
and members of the Rosenbaum family (which includes Jerrold Rosenbaum, Beth Angelo and Laurie Bauguss) are expected to own approximately 9.9%, 9.4% and 9.9%, respectively, of our outstanding common
stock, or 8.6%, 8.1% and 8.5%, respectively, if the underwriters' option to purchase additional shares is fully exercised. As a result, WestView, PineBridge and members of the Rosenbaum family may be
able to exert significant voting influence over fundamental and significant corporate matters and transactions. See "Risk Factors—Risks Related to this Offering and Ownership of Our Common
Stock—Concentration of ownership among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions."
WestView
is an independent, Boston-based private equity firm focused exclusively on lower middle market companies. WestView manages approximately $500 million in assets and makes equity
investments in companies in a variety of growth, buyout, consolidation and recapitalization transactions.
PineBridge
Investments LLC is an investment adviser registered under the U.S. Investment Advisers Act of 1940, as amended. PineBridge Investments LLC is a member company of PineBridge. PineBridge
provides investment advice and markets asset management products and services to its clients around the world.
Corporate and Other Information
Body Central Corp. was incorporated in Delaware in 2006. We are a holding company and all of our business operations are conducted through our two
wholly owned subsidiaries, Body Shop of America, Inc., which was incorporated in Florida in 1972, and Catalogue Ventures, Inc., which was incorporated in Florida in 2000.
Office Location
Our principal executive office is located at 6225 Powers Avenue, Jacksonville, Florida 32217, our telephone number is
(904) 737-0811 and our fax number is (904) 730-0638. Our website address is
www.bodyc.com
. We do not incorporate
the information contained on, or accessible through, our website into this prospectus, and you should not consider it part of this prospectus.
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The Offering
By Body Central Corp.
100,000 shares of common stock
By the selling stockholders
4,900,000 shares of common stock
Total
5,000,000 shares of common stock
Common stock to be outstanding immediately after this offering
15,505,677 shares of common stock
Over-allotment option
750,000 shares of common stock
Use of proceeds
We intend to use the net proceeds to us from this offering to provide funds for working capital and other general corporate purposes, including the growth of our store base and direct
business. See the "Use of Proceeds" section of this prospectus for more information. We will not receive any proceeds from the sale of shares by the selling stockholders.
Risk factors
You should read the "Risk Factors" section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.
Nasdaq Global Market symbol
BODY
The number of shares of our common stock to be outstanding after this offering is based on 15,405,677 shares of our common stock outstanding as of
January 21, 2011 and excludes:
•
1,094,094 shares of our common stock issuable upon the exercise of options outstanding as of January 21, 2011, at a
weighted average exercise price of $4.45 per share (of which 98,260 shares of our common stock (or 196,516 shares of common stock if the underwriters' over-allotment is exercised in full)
will be issued pursuant to the exercise of vested stock options held by certain of our selling stockholders in order to participate in this offering); and
•
1,646,209 shares of our common stock reserved for future issuance under our Amended and Restated 2006 Equity Incentive
Plan, which we refer to herein as the Plan.
Except
as otherwise indicated, all information in this prospectus assumes no exercise of the underwriters' over-allotment option.
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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
The following summaries of our consolidated financial and operating data for the periods presented should be read in conjunction with "Selected
Consolidated Financial and Operating Data," "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the
related notes included elsewhere in this prospectus. Our summary consolidated statement of operations data for the years ended December 29, 2007, January 3, 2009 and January 2,
2010 have been derived from our audited financial statements included elsewhere in this prospectus. The summary consolidated statement of operations data for the thirty-nine weeks ended
October 3, 2009 and October 2, 2010 have been derived from our unaudited financial statements included elsewhere in this prospectus. In the opinion of management, the unaudited interim
consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments necessary for the fair presentation of our financial
position and results of operations for these periods. The historical results presented below are not necessarily indicative of the results to be expected for any future period and the results for any
interim period may not necessarily be indicative of the results that may be expected for a full year.
We
operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December 31st. The reporting
periods contained in our audited financial statements included in this prospectus contain 52 weeks of operations in fiscal year 2007, which ended December 29, 2007, 53 weeks of
operations in fiscal year 2008, which ended January 3, 2009, and 52 weeks of operations in fiscal year 2009, which ended January 2, 2010.
See
"Capitalization" and "Use of Proceeds" for more information.
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Fiscal Year Ended
Thirty-Nine Weeks Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(dollars in thousands, except share, per share and operating data)
Statement of Income Data:
Net revenues
(1)
$
195,911
$
191,824
$
198,834
$
145,647
$
176,288
Cost of goods sold
(2)
140,334
137,982
139,145
103,678
118,358
Gross profit
55,577
53,842
59,689
41,969
57,930
Selling, general and administrative expenses
51,832
45,555
46,567
33,550
40,621
Depreciation and amortization
5,469
5,357
4,678
3,518
3,510
Impairment of long-lived assets
2,428
936
196
—
—
Goodwill impairment
33,962
—
—
—
—
(Loss) income from operations
(38,114
)
1,994
8,248
4,910
13,799
Interest expense, net of interest income
4,215
4,329
3,956
2,985
2,581
Other expense (income), net
238
(493
)
(128
)
(157
)
(105
)
(Loss) income before income taxes
(42,567
)
(1,842
)
4,420
2,073
11,323
(Benefit from) provision for income taxes
(3,237
)
(890
)
1,640
769
4,260
Net (loss) income
$
(39,330
)
$
(952
)
$
2,780
$
1,304
$
7,063
Net (loss) income per common share
Basic
$
(194.10
)
$
(5.42
)
$
12.94
$
5.86
$
34.20
Diluted
$
(194.10
)
$
(5.42
)
$
0.23
$
0.11
$
0.57
Weighted average common shares outstanding
Basic
203,235
203,235
203,235
203,235
203,235
Diluted
203,235
203,235
12,173,978
12,157,584
12,447,411
Pro Forma net income per common share
(3)
Basic
$
0.36
$
0.58
Diluted
$
0.35
$
0.57
Pro Forma weighted average common shares outstanding
(3)
Basic
14,861,730
14,861,730
Diluted
14,963,364
15,236,797
Operating Data (unaudited):
Revenues:
Stores
$
164,411
$
156,924
$
165,331
$
118,800
$
148,980
Direct
31,500
34,900
33,503
26,847
27,308
Net revenues
$
195,911
$
191,824
$
198,834
$
145,647
$
176,288
Stores:
Comparable store sales change
(4)
(4.6
)%
(8.0
)%
4.9
%
4.3
%
14.8
%
Number of stores open at end of period
188
180
185
179
204
Sales per gross square foot
$
206
$
204
$
207
$
154
$
170
Average square feet per store
4,246
4,283
4,312
4,319
4,289
Total gross square feet at end of period (in thousands)
798
771
798
773
875
Direct:
Number of catalogs circulated (in thousands)
16,000
20,300
20,500
17,200
18,300
Number of pages circulated (in millions)
1,088
1,380
1,394
1,170
1,244
Capital expenditures (in thousands)
$
9,656
$
2,640
$
4,809
$
2,725
$
5,494
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As of October 2, 2010
As of
January 2,
2010
Actual
Pro Forma
As Adjusted
(5)
(unaudited)
(in thousands)
Balance Sheet Data:
Cash and cash equivalents
$
7,226
$
5,823
$
Working capital
(1,967
)
(1,217
)
Total assets
79,209
84,398
Long-term debt, less current portion
33,000
25,518
Redeemable preferred stock
50,038
50,151
Stockholders' (deficit) equity
$
(36,891
)
$
(29,586
)
$
(1)
Consists
of net sales as well as shipping and handling fees.
(2)
Includes
direct cost of purchased merchandise, freight, occupancy, distribution costs, catalog costs, buying costs and inventory shrinkage.
(3)
The
pro forma net income per common share and pro forma weighted average common shares outstanding has been derived by applying pro forma
adjustments to our historical statements of operations as if this offering as well as our initial public offering were effective January 4, 2009. The pro forma net income per common share and
pro forma weighted average common shares outstanding are presented for supplemental informational purposes only. It does not purport to represent what our results of operations would have been had
this offering and our initial public offering actually occurred on January 4, 2009.
The
pro forma adjustment to net income gives effect to the deduction of $2.5 million and $1.6 million of interest expense, net of income tax benefit, for the fiscal year ended
January 2, 2010 and the thirty-nine weeks ended October 2, 2010, respectively, related to the repayment of all outstanding indebtedness under our senior credit facility.
The
pro forma adjustments to the weighted average common shares outstanding give effect to the following:
•
the sale by us of 2,520,616 shares of our common stock in our initial public offering used to repay all of our
outstanding indebtedness under our senior credit facility;
•
the sale by us of 268,770 shares of our common stock in our initial public offering used to redeem our
non-convertible, non-voting Series C preferred stock; and
•
the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock in
connection with our initial public offering.
The pro forma adjustments do not give effect to the following:
•
the sale by us of 100,000 shares of our common stock in this offering for working capital and general corporate purposes;
•
the sale by us of 76,924 shares of our common stock in our initial public offering to provide funds for the payment by us
of up to an aggregate of $1.0 million to specified employees, including certain named executive officers, under a success bonus plan triggered upon completion of our initial public offering;
•
the sale by us of 425,641 shares of our common stock in our initial public offering to provide funds for the underwriting
discounts and commissions and estimated offering expenses associated with our initial public offering; and
•
the sale by us of 41,382 shares of our common stock in our initial public offering to provide funds for working capital and
other general corporate purposes, including to grow our store base and our direct business, to convert Body Shop stores to Body Central banners, to refurbish older stores, to make technology
improvements and to make other capital expenditures.
(4)
A
store is included in comparable store sales on the first day of the fourteenth month after a store opens. For fiscal year 2008, which was a
53-week year, sales from the 53rd week were excluded from the calculation.
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(5)
Reflects
the balance sheet data as adjusted for the following:
•
the sale by us of 100,000 shares of common stock in this offering for working capital and general corporate purposes, at a
public offering price of $       per share, which is the midpoint of the price range on the cover of this prospectus, after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us;
•
the sale by us of 3,333,333 shares of common stock in our initial public offering at a per share price of $13.00, after
deducting underwriting discounts and commissions and estimated expenses payable by us;
•
the repayment of all outstanding indebtedness under our senior credit facility using proceeds from our initial public
offering;
•
the redemption of our non-convertible, non-voting Series C preferred stock using proceeds
from our initial public offering;
•
the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock in
connection with our initial public offering; and
•
the payment by us of an aggregate of $1.0 million to specified employees, including named executive officers, under
a success bonus plan triggered upon completion of our initial public offering.
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RISK FACTORS
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below,
together with all of the other information included in this prospectus, before making a decision to buy our common stock. The trading price of our common stock could decline due to any of these risks,
and, as a result, you may lose all or part of your investment.
Risks Related to Our Business
Our success depends on our ability to anticipate, identify and respond quickly to changing fashion trends, and our failure to respond to changing fashion trends could have a
material adverse effect on our business, financial condition and results of operations.
Our core market, apparel and accessories for women in their late teens and twenties, is subject to rapidly shifting fashion trends, customer tastes
and demands. Accordingly, our success is heavily dependent on our ability to anticipate, identify and capitalize on the latest fashion trends and customer demands, including merchandise, styles and
materials that will appeal and be saleable to our customers. A small number of our employees, including our Chief Merchandising Officer and our team of buyers, are primarily responsible for performing
this analysis and making product purchase decisions. Our failure to anticipate, identify or react swiftly to changes in styles, trends or desired image preferences or to anticipate demand is likely to
lead to lower demand for our merchandise, which could cause, among other things, sales declines, excess inventories and a greater number of markdowns. If we do not accurately forecast fashion trends
and sales levels, our business, financial condition and results of operations will be adversely affected.
Our growth strategy depends upon our ability to successfully open and operate new stores each year in a timely and cost-effective manner without affecting the
success of our existing store base.
Our strategy to grow our business depends partly on continuing to open new stores for the foreseeable future. Our future operating results will
depend largely upon our ability to find a sufficient number of suitable locations that will allow us to successfully open and operate new stores each year in a timely and cost-effective
manner. We believe there are many opportunities to expand our store base from our 209 locations as of January 1, 2011. We opened 15 new stores in fiscal year 2009 and 27 new stores in fiscal
2010. In fiscal year 2011, we plan to open approximately 30 to 35 new stores. Our current expansion plans are only targets, and the actual number of new stores we open could differ significantly from
these estimates.
Our
ability to successfully open and operate new stores depends on many factors including, among others, our ability to:
•
identify desirable store locations, primarily in regional malls as well as outlet, lifestyle and power centers;
•
negotiate acceptable lease terms, including desirable tenant allowances;
•
maintain out-of-pocket, build-out costs in line with our store economic model,
including through leveraging landlords' reimbursements for a portion of our construction expenses, as well as managing these costs at reasonable levels;
•
hire, train and retain a growing workforce of store managers, sales associates and other personnel;
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•
successfully integrate new stores into our existing control structure and operations, including our information technology
systems; and
•
efficiently expand the operations of our distribution facility to meet the needs of a growing store network.
Our
near-term expansion plans have us opening new stores in or near the areas where we already have existing stores. As a result, we may face risks associated with market saturation of our
merchandise. Also, if we expand into new geographic areas, we will need to successfully identify and satisfy the fashion preferences of our target customers in these areas. In addition, we will need
to address competitive, merchandising, marketing, distribution and other challenges encountered in connection with any expansion.
Finally,
we cannot assure you that any newly opened stores will be received as well as, or achieve net sales or profitability levels comparable to those of, our existing stores in our estimated time
periods, or at all. If our stores fail to achieve, or are unable to sustain, acceptable net sales and profitability levels, our business may be materially harmed and we may incur significant costs
associated with closing or
relocating stores. If we fail to successfully open and operate new stores and execute our growth plans, the price of our common stock could decline.
Our business is sensitive to consumer spending and economic conditions.
Consumer purchases of apparel, accessories and particularly discretionary retail items, including our fashion merchandise, may be adversely affected
by economic conditions such as employment levels, salary and wage levels, the availability of consumer credit, inflation, high interest rates, high tax rates, high fuel prices and consumer confidence
with respect to current and future economic conditions. Consumer purchases may decline during recessionary periods or at other times when unemployment is higher or disposable income is lower. These
risks may be exacerbated for retailers like us that focus significantly on selling discretionary fashion merchandise. Consumer willingness to make discretionary purchases may decline, may stall, or
may be slow to increase due to national and regional economic conditions. Our financial performance is particularly susceptible to economic and other conditions in regions or states where we have a
significant number of stores, such as Florida, Texas, Pennsylvania and Georgia. There remains considerable uncertainty and volatility in the national and global economy. Further or future slowdowns or
disruptions in the economy could adversely affect mall traffic and new mall and shopping center development and could materially and adversely affect us and our growth plans. We may not be able to
maintain our recent rate of growth in net revenues if there is a decline in consumer spending patterns.
We operate in the highly competitive specialty retail apparel industry and the size and resources of some of our competitors may allow them to compete more effectively than
we can, which could impact our ability to grow our business or result in loss of our market share.
We face intense competition in the specialty retail apparel industry. We compete on the basis of a combination of factors, including price, breadth,
quality and style of merchandise, as well as our brand image and ability to respond to fashion trends. While we believe that we compete primarily with specialty retailers, catalog retailers and
Internet businesses that specialize in women's apparel and accessories, we also face competition from department stores and value retailers. We believe our primary competitors include specialty
apparel retailers that offer their own private labels, including Forever 21, Wet Seal, rue21, Charlotte Russe and Aéropostale, among others. In addition, our expansion into markets
served by our competitors and entry of new competitors or expansion of existing competitors into our markets could have a material adverse effect on our business.
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We
also compete with a wide variety of large and small retailers for customers, vendors, suitable store locations and personnel. The competitive landscape we face, particularly among specialty
retailers, is subject to rapid change as new competitors emerge and existing competitors change their offerings. We cannot assure you that we will be able to compete successfully and navigate the
shifts in our market.
Many
of our competitors are, and many of our potential competitors may be, larger and have greater name recognition and access to greater financial, marketing and other resources. Therefore, these
competitors may be able to adapt to changes in trends and customer desires more quickly, devote greater resources to the marketing and sale of their products, generate greater brand recognition or
adopt more aggressive pricing policies than we can. In addition, catalog mailings by our competitors may adversely affect response rates to our own catalog mailings. As a result, we may lose market
share, which would reduce our sales and revenues and adversely affect our results of operations.
Our inability to maintain or improve levels of comparable store sales could negatively impact our profitability and financial operations.
Our recent comparable store sales have been higher than our historical comparable store sales, and we may not be able to sustain or improve these
levels. If our future comparable store sales decline or fail to meet market expectations, our profitability could be harmed and the price of our common stock could decline. In addition, the aggregate
results of our store operations have fluctuated in the past and can be expected to fluctuate in the future. A variety of factors affect comparable store sales, including fashion trends, competition,
current national and regional economic conditions, pricing, changes in our merchandise mix, inventory shrinkage, the success of our marketing programs, holiday timing and weather conditions. In
addition, it may be more challenging for us to sustain high levels of comparable store sales growth during and after the planned expansion of our store base. These factors may cause our comparable
store sales results to be materially lower than in recent periods and lower than market expectations, which could harm our business and our earnings and result in a decline in the price of our common
stock.
Our ability to attract customers to our stores that are located in regional malls and other shopping centers and venues depends heavily on the success of the malls and
centers in which our stores are located, and any decrease in customer traffic could cause our net sales to be less than expected.
Our stores are principally located in regional malls, with some in outlet, lifestyle and power centers, and we would expect this to continue as we
grow. Net sales at our stores are derived, to a significant degree, from the volume of traffic in those malls and centers and the surrounding areas. Our stores benefit from the ability of adjacent
tenants to generate consumer traffic near our stores and the continuing popularity of the regional malls and outlet, lifestyle and power centers as shopping destinations. Our sales volume and traffic
may be adversely affected by, among other things, economic downturns nationally or regionally, high fuel prices, increased competition, unfavorable weather conditions, changes in consumer
demographics, a decrease in popularity of malls generally or of particular malls in which our stores are located. A reduction in customer traffic as a result of these or any other factors, or our
inability to obtain or maintain desirable store locations within malls, could have a material adverse effect on our business. In addition, store closings in malls, particularly stores that attract
similar customers, or deteriorations in the financial condition of mall operators could limit their ability to finance our tenant improvements, which would have an adverse impact on our ability to
open profitable stores.
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Our business largely depends on a strong brand image, and if we are not able to maintain and enhance our brand, particularly in new markets where we have limited brand
recognition, we may be unable to attract a sufficient number of customers to our stores or sell sufficient quantities of our merchandise through our direct business.
We believe that our brand image and brand awareness has contributed significantly to the success of our business. We also believe that maintaining
and enhancing our brand image particularly in new markets where we have limited brand recognition is important to maintaining and expanding our customer base. Maintaining and enhancing our brand image
may require us to make substantial investments in areas such as merchandising, marketing, store operations, community relations, store graphics, catalog distribution and employee training. These
investments may be substantial and may not ultimately be successful.
We
rely on word-of-mouth, foot traffic, catalogs and email blasts to capture the interest of our customers and drive them to our stores and website. We do not use
traditional advertising channels, such as newspapers, magazines, billboards, television and radio, which are used by some of our competitors. We expect to increase our use of social media, such as
Facebook and Twitter, in the future. If our marketing efforts are not successful, there may be no immediately available alternative marketing channel for us to build or maintain brand awareness.
As
we execute our growth strategy, our ability to successfully integrate new stores into their surrounding communities, to expand into new markets or to maintain the strength or distinctiveness of our
brand image in our existing markets will be adversely impacted if we fail to connect with our target customer. Failure to successfully market our brand in new and existing markets could harm our
business, results of operations and financial condition.
We recently replaced or are planning to replace several core information technology systems, which might disrupt our operations and cause us to incur significant unexpected
expenses.
In the fourth quarter of 2010, we finished the complete replacement of our stores' point-of-sale software system with an
off-the-shelf application from a specialty retail store system vendor. When implementing new technology systems, even an off-the-shelf solution, there is always risk that the
system does not function properly or that other challenges arise that we did not anticipate. There are inherent risks associated with replacing point-of-sale software systems,
including the risk of disruptions that affect our ability to obtain timely and accurate sales information or that cause delays in our ability to service our customers in stores.
During
July 2010, we replaced key systems which support our direct business, including our sales order, purchase order and warehouse management systems as well as our website and web interface
application. These replacements and upgrades will allow us to handle more orders than our current system and provide a better user experience for our direct customers. In the near-term,
delays and disruptions in order processing and fulfillment resulting from the new website and direct business software replacement could arise, either of which might negatively impact our direct
business in the form of delivery disruptions, reduced sales or reduced access to our website.
In
fiscal year 2011, we plan to install a new planning and allocation system for our store business. This system will supplement our existing inventory system, thereby allowing us to manage our
inventory more efficiently. Our existing inventory management system for our store business and our accounting system may need to be upgraded and replaced over time depending on our growth. As
described above, the risks associated with these systems changes could disrupt and adversely impact the promptness and accuracy of our merchandise distribution, transaction processing, financial
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accounting
and reporting, including the implementation of our internal controls over financial reporting.
We
believe that other companies have experienced significant delays and cost overruns in implementing similar systems changes, and we may encounter problems as well. We may not be able to successfully
implement these new systems or, if implemented, we may still face unexpected disruptions in the future. Any resulting disruptions could harm our business, prospects, financial condition and results of
operations.
To support our current growth strategy, we will need to place increasing reliance on our information technology and distribution systems. Any failure, inadequacy or
interruption of our systems could harm our ability to effectively operate our business.
As our operations grow, greater demands will be placed on our information technology, distribution, sales order and inventory management systems. Our
ability to effectively manage and maintain controls and procedures related to financial reporting, to manage and maintain our inventory and to ship products to our stores and our customers on a timely
basis depends to a significant extent on our in-store systems, including our point-of-sale software and inventory management systems, as well as our systems that
enable our direct business through our catalog and website. See "Business—Information Technology Systems" for a more detailed description of our systems and "—We recently
replaced or are planning to replace several core information technology systems, which might disrupt our operations and cause us to incur significant unexpected expenses" for a description of certain
changes to our core systems. To manage the growth of our operations, personnel and real estate portfolio, we will need to continually improve and expand our operational resources, including our
operational and financial systems, transaction processing and internal controls and business processes. In doing so, we would expect to encounter transitional issues that could cause us to incur
substantial additional expenses. The failure of our information systems to operate effectively, problems with transitioning to upgraded or replacement systems or expanding them into new stores or a
breach in security of these systems, could adversely impact the promptness and accuracy of our merchandise distribution, transaction processing, financial accounting and reporting, the efficiency of
our operations and our ability to properly forecast earnings and cash requirements. We cannot anticipate all the demands that will be placed on our systems and we could be required to make significant
additional expenditures to remediate any failure to upgrade, problems or breaches of
our information technology systems, which could have a material adverse effect on our results of operations and business.
Our current growth plans will place a strain on our existing resources and could cause us to encounter challenges we have not faced before.
As our number of stores and our direct sales grow, our operations will become more complex. While we have grown substantially as a company since
inception, this growth has been over a period of decades. As we move forward, we expect our growth to bring new challenges that we have not faced before. Among other strains, this growth may make it
more difficult for us to adequately predict expenditures, such as real estate and construction expenses, budgeting will become more complex, and we also may place increased burdens on our vendors, as
we will likely increase the size of our merchandise orders. As a result, if new order delivery times lengthen, we could see more fashions arrive after trends have passed, resulting in excess inventory
and greater markdowns.
In
addition, our planned expansion is expected to place increased demands on our existing operational, managerial, administrative and other resources. Specifically, our inventory management systems
and personnel processes may need to be upgraded to keep pace with our current growth strategy. We cannot anticipate all of the demands that our expanding operations will impose on our business, and
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our
failure to appropriately address these demands could have a material adverse effect on our business.
We depend on key personnel and may not be able to retain or replace these individuals or recruit additional personnel, which could harm our business.
We believe that we have benefited substantially from the leadership and experience of our key personnel, including our President and Chief Executive
Officer, Allen Weinstein, our Chief Merchandising Officer, Beth Angelo, and our Chief Financial Officer, Richard Walters. Our employees may terminate their employment with us at any time. The loss of
any of our key personnel could have a material adverse effect on our business, as we may not be able to find suitable individuals to replace them on a timely basis. In addition, any departures of key
management could be viewed in a negative light by investors and analysts, which could cause our common stock price to decline.
As
our business expands, our future success will depend greatly on our continued ability to attract and retain highly skilled and qualified personnel. Attracting and retaining experienced and
successful personnel in the retail industry is competitive. If we are not able to meet, hire and retain key members of senior management, our growth strategy and business generally could be impaired.
Our business will suffer and our growth strategy may not be successful if we are unable to find and retain store employees that reflect our brand image and embody our
culture.
Like most retailers, we experience significant employee turnover rates, particularly among store employees. Our planned growth will require us to
hire and train even more personnel to manage our expected growth. Our success depends in part upon our ability to continually attract, motivate and retain a sufficient number of store employees who
understand and can represent and appreciate our brand and customers. We compete for qualified personnel with a variety of companies looking to hire for retail positions. Historically, we have prided
ourselves on our commitment to employee growth and development and we focus on promoting from within our team. Our growth plans will strain our ability to staff our new stores, particularly at the
store manager level, which could have an adverse effect on our ability to maintain a cohesive and consistently strong team, which in turn could have an adverse impact on our business. If we are unable
to attract, train, assimilate or retain employees in the future, we may not be able to service our customers effectively, thus reducing our ability to continue our growth and to operate our existing
stores as profitably as we have in the past.
We only have one facility which is both our corporate headquarters and distribution facility and have not yet implemented disaster recovery procedures. If we encounter
difficulties associated with this facility, we could face inventory shortages that would have a material adverse effect on our business operations.
Our corporate headquarters and our only distribution facility are located in one facility in Jacksonville, Florida. Our distribution facility
supports both our retail stores and our direct business. All of our merchandise is shipped from our vendors to the distribution facility and then packaged and shipped from our distribution facility to
our stores and our direct customers. Our stores and our direct customers must receive merchandise in a timely manner in order to stay current with the fashion preferences of our customers. While we
believe the size and scale of our distribution center is sufficient to service our growth plans for the foreseeable future, the efficient flow of our merchandise requires that we have adequate
capacity in our distribution facility to support our current level of operations and our growth plans. If we encounter difficulties associated with our distribution facility or if it were to shut down
for any reason, including by fire or other natural disaster, we could face inventory shortages resulting in "out-of-stock" conditions in our stores, and delays in shipments to
our direct customers, resulting in significantly higher costs and longer lead times associated with distributing our
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merchandise.
In addition, most of our computer equipment and senior management, including critical resources dedicated to merchandising, financial and administrative functions, are located at our
corporate headquarters. Our management and our operations and distribution staff would need to find an alternative location, causing further disruption and expense to our business and operations.
We
recognize the need for, and are in the early stages of, developing disaster recovery, business continuity and document retention plans that would allow us to be operational despite casualties or
unforeseen events impacting our corporate headquarters or distribution center. Without disaster recovery, business continuity and document retention plans, if we encounter difficulties or disasters
with our distribution facility or at our corporate headquarters, our critical systems, operations and information may not be restored in a timely manner, or at all, and this would have a material
adverse effect on our business.
We are subject to risks associated with leasing substantial amounts of space, including future increases in occupancy costs.
We do not own any real estate. Instead, we lease all of our store locations, as well as our corporate headquarters and distribution facility in
Jacksonville, Florida. Although our leases range from month-to-month to approximately ten
years, we typically occupy our stores under operating leases with terms of six to ten years. Some of our leases have early termination provisions if we do not achieve specified sales targets after an
initial term, which is typically four years. We believe that we have been able to negotiate favorable rental rates over the last few years due in part to the state of the economy and higher than usual
vacancy rates in a number of regional malls. These trends may not continue and there is no guarantee that we will be able to continue to negotiate such favorable terms. As we expand our store base,
our lease expense and our cash outlays for rent and other related charges will increase. In addition to future minimum lease payments, most of our leases provide for additional rental payments based
upon our achieving specified net sales, and many provide for additional payments associated with common area maintenance, real estate taxes and insurance. In addition, many of our lease agreements
have escalating rent provisions over the initial term. Our substantial occupancy costs could have significant negative consequences, which include:
•
requiring that a substantial portion of our available cash be applied to pay our rental obligations, thus reducing cash
available for other purposes;
•
increasing our vulnerability to general adverse economic and industry conditions; and
•
limiting our flexibility in planning for, or reacting to changes in, our business or in the industry in which we compete.
We
depend on cash flow from operations to pay our lease expenses and to fulfill our other cash needs. If our business does not generate sufficient cash flow from operating activities to fund these
expenses and needs and sufficient funds are not otherwise available to us, we may not be able to service our lease expenses, grow our business, respond to competitive challenges or fund our other
liquidity and capital needs, which would harm our business. If an existing or future store is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations
under the applicable lease including, among other things, paying rent for the balance of the lease term. In addition, if we are not able to enter into new leases or renew existing leases on terms
acceptable to us, this could have an adverse effect on our results of operations.
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Our ability to obtain merchandise quickly and at competitive prices could suffer as a result of any deterioration or change in our vendor relationships or their businesses.
We do not own or operate any manufacturing facilities. Instead, we purchase all of our merchandise from third-party vendors. Two of our vendors
accounted for approximately 22% of our purchases in fiscal year 2009, with no single vendor accounting for more than 11% of our purchases. Our business and financial performance depend in large part
on our ability to quickly evaluate merchandise for style and fit and also to test and purchase a wide array of desired merchandise from our vendors at competitive prices and in the quantities we
require. We generally operate without long-term purchase contracts or other contractual guarantees. Rather, we receive and review samples almost daily for fit and fashion evaluation.
The
benefits we currently experience from our vendor relationships could be adversely affected if a sufficient number of our vendors:
•
choose to stop providing merchandise samples to us or otherwise discontinue selling products to us;
•
raise the prices they charge us to a level such that we are unable to sell merchandise at prices that make sense for us
and our customers;
•
change pricing terms to require us to pay on delivery or upfront, including as a result of changes in the credit
relationships some of our vendors have with their various lending institutions;
•
reduce our access to styles, brands and products by entering into broad exclusivity arrangements with our competitors or
otherwise in the marketplace;
•
sell similar products to our competitors with similar or better pricing; or
•
initiate or expand sales of apparel and accessories to retail customers directly through their own stores, catalogs or on
the Internet and compete with us directly.
Market
and economic events that adversely impact our vendors could impair our ability to obtain merchandise in sufficient quantities. For instance, in recent months the cost of cotton has increased,
which could cause our vendors to increase their prices and impact the prices we charge and our results of operations. We historically have established good working relationships with many
small- to mid-size vendors that often have more limited resources, production capacities and operating histories. As we grow and need greater amounts of inventory, we may need
to develop new relationships with larger vendors as our current vendors may be unable to supply us with needed quantities. We may not be able to find similar products on the same terms from larger
vendors. If we are unable to acquire suitable merchandise in sufficient quantities and at acceptable prices due to the loss of, or a deterioration or change in our relationship with, our vendors or
events harmful to our vendors occur, it may adversely affect our business and results of operations.
A failure in our e-commerce operations, which are subject to factors beyond our control, could significantly disrupt our business and lead to reduced sales and
reputational damage.
Our direct business operations are growing and represent an important part of our business, accounting for approximately 16.8% of our net revenues in
fiscal year 2009. Expanding our direct business is an important part of our growth strategy. In addition to changing consumer preferences and buying trends in e-commerce, we are vulnerable
to certain additional risks and uncertainties associated with Internet sales, including changes in required technology interfaces, website downtime and other technical failures, security breaches and
consumer privacy concerns. During fiscal year 2009,
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our
e-commerce system suffered a system wide shutdown for a period of approximately six days, resulting in losses to our net revenues. We recently replaced or are planning to replace
several core information technology systems, including the replacement of the key systems which support our direct business. The replacement of these systems might disrupt our operations and cause us
to incur significant expenses as described elsewhere in this prospectus. Our failure to successfully respond to these risks and uncertainties could reduce Internet sales and damage our brand's
reputation.
Many
of the risks relating to our e-commerce operations are beyond our control, such as state initiatives to impose sales tax collection or use tax reporting for Internet sales,
governmental
regulation of the Internet, increased competition from e-commerce retailers offering similar products, online security breaches and general economic conditions specific to the Internet and
e-commerce. Each of these factors could negatively impact our results of operations.
System security risk issues could disrupt our internal operations or information technology systems, and any such disruption could harm our net revenues, increase our
expenses, and harm our reputation, results of operations and stock price. In addition, incidents in which we fail to protect our customers' information against security breaches could result in
monetary damages against us and could otherwise damage our reputation, harm our businesses and adversely impact our results of operations.
Experienced computer programmers and hackers, or even internal users, may be able to penetrate, create systems disruptions or cause shutdowns of our
network security or that of third-party companies with which we have contracted to provide payment processing services. As a result, we could incur significant expenses addressing problems created by
these breaches. This risk is heightened because we collect and store customer information for marketing purposes. Any compromise of customer information could subject us to customer or government
litigation and harm our reputation, which could adversely affect our business and growth. Moreover, we could incur significant expenses or disruptions of our operations in connection with system
failures or data breaches. In addition, sophisticated hardware and operating system software and applications that we buy from third-parties may contain defects in design or manufacture, including
"bugs" and other problems that could unexpectedly interfere with the operation of the systems. The costs to us to eliminate or alleviate security problems, viruses and bugs, or any problems associated
with the outsourced services provided to us, could be significant, and efforts to address these problems could result in interruptions, delays or cessation of service that may impede our sales,
distribution or other critical functions.
In
addition, almost all states have adopted breach of data security statutes or regulations that require notification to consumers if the security of their personal information is breached, and at
least one state has adopted regulations requiring every company that maintains or stores personal information to adopt a comprehensive written information security program. Governmental focus on data
security may lead to additional legislative action, and the increased emphasis on information security may lead customers to request that we take additional measures to enhance security. As a result,
we may have to modify our business with the goal of further improving data security, which would result in increased expenses and operating complexity. Lastly, our reputation may be damaged by any
compromise of security, accidental loss or theft of customer data in our possession, which would negatively impact our business, financial condition or results of operations.
Hurricanes or other unanticipated catastrophes that result in a disruption of our operations could negatively impact our business.
Our corporate headquarters and only distribution center are located at a single facility in Jacksonville, Florida. This single distribution center
receives, stores and distributes merchandise to all of our stores and fulfills all sales for our direct business. Most of our computer equipment and senior management, including critical resources
dedicated to merchandising, financial and administrative functions, are
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located
at our corporate headquarters. As described elsewhere in the risk factors in this prospectus, we do not have adequate disaster recovery systems and plans at our corporate headquarters and
distribution facility. As a result, our business may be more susceptible to regional natural disasters and catastrophes than the operations of more geographically diversified competitors.
In
addition, a substantial number of our stores are located in the southeastern U.S. The southeastern U.S., Florida and other states along the Gulf Coast, in particular, are prone to severe weather
conditions. For example, hurricanes have passed through Florida and other states along the Gulf Coast causing extensive damage to the region. In addition, to the extent that the predictions of some
climate change models prove accurate, there may be significant national and regional physical effects from climate change such as increases in storm intensity and frequency, including hurricanes. An
increase in adverse weather conditions impacting Florida and other states along the Gulf Coast, and the southeastern U.S. generally, could harm our business, results of operations and financial
condition. For instance, our Nashville mall store has been closed since spring 2010 due to flooding in that region and we do not expect to re-open this store until early 2012. In fact, all
of our locations expose us to additional diverse risks, given that natural disasters or other unanticipated catastrophes, such as telecommunications failures, cyber-attacks, fires or terrorist
attacks, can occur anywhere and could cause disruptions in our operations. Extensive or multiple disruptions in our operations, whether at our stores or our corporate headquarters and distribution
center, due to natural disasters or other unanticipated catastrophes could have a material adverse effect on our results of operations.
Our net revenues and merchandise fluctuate on a seasonal basis, leaving our operating results particularly susceptible to changes in seasonal shopping patterns, weather and
related risks.
Due to the seasonal nature of the retail industry, we have historically experienced and expect to continue to experience some fluctuations in our net
revenues and net income. Our net revenues are typically higher in the second and fourth quarters. Net revenues generated during the second quarter and the holiday selling season generally contribute
to the relatively
higher second quarter and fourth quarter net income. Net revenues during these periods cannot be used as an accurate indicator of annual results. In addition, net revenues in a period can fluctuate
due to shifts in the timing of holidays. For instance, the Easter holiday will occur during different fiscal quarters from year to year. If for any reason our net revenues were below seasonal norms or
expectations during these quarters, our annual results of operations could be adversely affected. In addition, in order to prepare for the second and fourth quarters, we must order and keep in stock
more merchandise than we carry at other times during the year. This inventory build-up may require us to expend cash faster than is generated by our operations during this period.
Our
net revenues also fluctuate based on weather patterns. Any unanticipated decrease in demand for our products during these peak shopping periods could require us to sell excess inventory at a
substantial markdown, which could have a material adverse effect on our business, profitability and brand image. In addition, we may experience variability in net revenues as a result of a variety of
other factors, including the timing of new store openings and catalog mailings, store events, other marketing activities, sales tax holidays and the back-to-school selling
season and other holidays, which may cause our results of operations to fluctuate on a quarterly basis and relative to corresponding periods in prior years.
Increases in costs of catalog mailing, paper and printing will affect the cost of our direct business, which will reduce our profitability.
Postal rate increases and paper and printing costs increase our catalog distribution costs and affect the financial results of our direct business.
We rely on discounts from the basic postal rate structure, such as discounts for bulk mailings and sorting by zip code and carrier routes. We are not a party to any long-term contracts for
the supply of paper. Our cost of paper has fluctuated significantly, and our future paper costs are subject to supply and demand forces that we cannot control. Future additional increases in postal
rates or in paper or printing costs could reduce our profitability to the extent that we are unable to pass those increases directly to customers or offset those increases by raising selling prices.
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We may suffer risks if our vendors fail to comply with applicable laws, including a failure to use acceptable labor practices, or if our vendors suffer disruptions in their
businesses.
Our vendors source the merchandise sold in our stores from manufacturers both inside and outside of the U.S. Although each of our purchase orders is
subject to our vendor manual and requires adherence to accepted labor practices and compliance with labor, immigration, manufacturing safety and other laws, we do not supervise, control or audit our
vendors or the manufacturers that produce the merchandise we sell. The violation of any labor, immigration, manufacturing safety or other laws by any of our vendors or their U.S. and
non-U.S. manufacturers, such as use of child labor, could damage our brand image or subject us to boycotts by our customers or activist groups.
Any
event causing a sudden disruption of manufacturing or imports, including the imposition of additional import restrictions, could interrupt, or otherwise disrupt, the shipment of finished products
to us by our vendors and materially harm our operations. Political and financial instability outside the U.S., strikes, adverse weather conditions or natural disasters that may occur or acts of war or
terrorism in the U.S. or worldwide, may affect the production, shipment or receipt of merchandise. These factors, which are beyond our control, could materially hurt our business, financial condition
and results of operations or may require us to modify our current business practices or incur increased costs.
Changes in laws, including employment laws and laws related to our merchandise, could make conducting our business more expensive or otherwise cause us to change the way we
do business.
We are subject to numerous regulations, including labor and employment, truth-in-advertising, consumer protection and zoning
and occupancy laws and ordinances that regulate retailers generally or govern the promotion and sale of merchandise and the operation of stores and warehouse facilities. If these regulations were to
change or were violated by our management, employees or vendors, the costs of certain goods could increase, or we could experience delays in shipments of our goods, be subject to fines or penalties or
suffer reputational harm, which could reduce demand for our merchandise and hurt our business and results of operations.
In
addition to increased regulatory compliance requirements, changes in laws could make the ordinary conduct of our business more expensive or require us to change the way we do business. Laws related
to employee benefits and treatment of employees, including laws related to limitations on employee hours, immigration laws, child labor laws, supervisory status, leaves of absence, mandated health
benefits or overtime pay, could also negatively impact us, such as by increasing compensation and benefits costs for overtime and medical expenses. Moreover, changes in product safety or other
consumer protection laws could lead to increased costs to us for some merchandise, or additional labor costs associated with readying merchandise for sale. It is often difficult for us to plan and
prepare for potential changes to applicable laws, and future actions or payments related to these changes could be material to us.
We plan to use cash from operations to fund our operations and execute our growth strategy. We may, however, require additional financing and any additional indebtedness
could adversely affect our financial health and impose covenants that limit our business activities.
We plan to open a number of new stores and remodel existing stores as opportunities arise. As we work to grow our business and store base, we will
require cash from operations to pay our lease obligations, build out new store spaces, purchase inventory, pay personnel and further invest in our systems and infrastructure. While we expect a larger
store base to increase net sales, we cannot assure you that we would achieve an increase. Payments under our store leases and the lease of our corporate headquarters and distribution center account
for a significant portion of our operating expenses.
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If
our business does not generate sufficient cash flow from operations to fund our business and growth plans, and sufficient funds are not otherwise available to us from the net proceeds received from
this offering, we may need additional equity or debt financing. If additional equity or debt financing is not available to us on satisfactory terms, our ability to run and expand our business would be
curtailed and we may need to delay, limit or eliminate store openings. Also, we may not have enough cash on hand to fund any operating shortfalls. If we raise additional capital by issuing equity
securities or securities convertible into equity securities, your ownership would be diluted.
Any
borrowings under any future debt financing will require interest payments and need to be repaid or refinanced, and would create additional cash demands and financial risk for us. Diverting funds
identified for other purposes for debt service may impair our liquidity position. If we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance our debt,
dispose of assets or issue equity to obtain necessary funds. We do not know whether we would be able to take any of these actions on a timely basis, on terms satisfactory to us, or at all. Any
indebtedness we might incur in the future may contain covenants that restrict our ability to incur additional debt, pay dividends, make acquisitions or investments or do certain other things that may
impact the value of our common stock.
There are claims made against us from time to time that can result in litigation that could distract management from our business activities and result in significant
liability or damage to our brand.
As a growing company with expanding operations, we increasingly face the risk of litigation and other claims against us. Litigation and other claims
may arise in the ordinary course of our business and include employee claims, commercial disputes, intellectual property issues, product-oriented allegations and slip and fall claims. These claims can
raise complex factual and legal issues that are subject to risks and uncertainties and could require significant management time. Litigation and other claims against us could result in unexpected
expenses and liabilities, which could materially adversely affect our operations and our reputation.
We may be unable to protect our trademarks or other intellectual property rights.
We believe that our trademarks are integral to our store design, our direct business and our success in building brand image and loyalty. We have
registered those trademarks that we believe are important to our business with the U.S. Patent and Trademark Office. We cannot assure you that these registrations will prevent imitation of our name,
merchandising concept, store design or private label merchandise or the infringement of our other intellectual property rights by others. In most cases, the apparel and accessories we sell are
purchased on a non-exclusive basis from vendors that also sell to our competitors. Our competitors may seek to replicate aspects of our business strategy and in-store
experience, thereby diluting our experience and adversely affecting our brand and competitive position. Imitation of our name, concept, store design or merchandise in a manner that projects lesser
quality or carries a negative connotation of our brand image could have a material adverse effect on our business, financial condition and results of operations.
In
some regions of the U.S., our stores are located in the same malls and shopping centers as stores operated by a company doing business under the name The Body Shop®, which operates
cosmetics and beauty stores. While we are not affiliated with this company, in 1991, we granted this company a license to use our Body Shop trademark which is held by us in connection with retail
store services for the sale of women's apparel and apparel accessories. This license was non-exclusive as to certain uses and our agreements with this company permit us to continue to use our "Body
Shop' mark in our stores located in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. While we currently operate under the
Body Central banner, we operate under the Body Shop banner in 61 stores in certain states. The use by the cosmetic
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and
beauty store of the Body Shop trademark may create confusion between our business and their business and this could affect our brand.
We
are not aware of any claims of infringement upon or challenges to our right to use any of our brand names or trademarks in the U.S. Nevertheless, we cannot be certain that the actions we have taken
to establish and protect our trademarks will be adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as a violation of the
trademarks or proprietary rights of others. Although we cannot currently estimate the likelihood of success of any such lawsuit or ultimate resolution of such a conflict, such a controversy could have
a material adverse effect on our business, financial condition and results of operations. If disputes arise in the future, we may not be able to successfully resolve these types of conflicts to our
satisfaction.
Because
we have not registered our trademarks in any foreign countries, international protection of our brand image and the use of these marks could be limited. For instance, we are aware of a company
outside the U.S. that has used our brand name and has a similar logo, image and website for its business. Also, other entities may have rights to trademarks that contain portions of our marks or may
have registered similar or competing marks for apparel or accessories in foreign countries in which our vendors source our merchandise. Our inability to register our trademarks or purchase or license
the right to use our trademarks or logos in these jurisdictions could limit our ability to obtain supplies from less costly markets or penetrate new markets should our business plan change to include
selling our merchandise in those foreign jurisdictions.
We may be subject to liability if we or our vendors infringe upon the trademarks or other intellectual property rights of third parties, including the risk that we could
acquire merchandise from our vendors without the full right to sell it.
While we do not manufacture and produce apparel and accessories, we may be subject to liability if our vendors infringe upon the trademarks or other
intellectual property rights of third parties. We do not independently investigate whether our vendors legally hold intellectual property rights to the merchandise they manufacture and distribute.
Third parties may bring legal claims, or threaten to bring legal claims, against us that their intellectual property rights are being infringed or violated by our use of intellectual property.
Litigation or threatened litigation could be costly and distract our senior management from operating our business. If we were to be found liable for any such infringement, we could be required to pay
substantial damages and could be subject to injunctions preventing further infringement. In addition, any payments we are required to make and any injunctions with which we are required to comply as a
result of infringement claims could be costly and thereby adversely affect our financial results.
If
a third party claims to have licensing rights with respect to merchandise we purchased from a vendor, or if we acquire unlicensed merchandise, we may be obligated to remove this merchandise from
our stores, incur costs associated with this removal if the distributor or vendor is unwilling or unable to reimburse us and be subject to liability under various civil and criminal causes of action,
including actions to recover unpaid royalties and other damages and injunctions. Additionally, we will be required to purchase new merchandise to replace any we remove.
We rely upon independent third-party transportation providers for substantially all of our merchandise shipments.
We currently rely upon independent third-party transportation providers for substantially all of our merchandise shipments, including shipments to
all of our stores and our direct customers. Our use of outside delivery services for shipments is subject to risks, including increases in fuel prices, which would increase our shipping costs, and
employee strikes and inclement weather, which may impact a
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shipper's
ability to provide delivery services that adequately meet our shipping needs. If we change shipping companies, we could face logistical difficulties that could adversely impact deliveries
and we would incur costs and expend resources in connection with such change. Moreover, we may not be able to obtain terms as favorable as those received from the independent third-party
transportation providers we currently use, which would increase our costs.
Our ability to source our merchandise profitably could be hurt if new trade restrictions are imposed or existing trade restrictions become more burdensome.
We currently purchase all of our inventory from domestic, third-party vendors, who source our merchandise both domestically and internationally.
These vendors, to the extent they obtain apparel and accessories from outside of the U.S., are subject to trade restrictions, including increased tariffs, safeguards or quotas, which could increase
the cost or reduce the supply of merchandise available to us. Under the World Trade Organization Agreement, effective January 1, 2005, the U.S. and other World Trade Organization member
countries removed quotas on goods from World Trade Organization members, which in certain instances we believe affords our vendors greater flexibility in importing textile and apparel products from
World Trade Organization countries from which they source our merchandise. However, as the removal of quotas resulted in an import surge from China, the U.S. imposed safeguard quotas on a number of
categories of goods and apparel from China and may impose additional quotas in the future. These and other trade restrictions could have a significant impact on our vendor's sourcing patterns in the
future. The extent of this impact, if any, and the possible effect on our purchasing patterns and costs, cannot be determined at this time. We cannot predict whether any of the countries in which our
vendors' merchandise is currently manufactured or may be manufactured in the future will be subject to additional trade restrictions imposed by the U.S. and foreign governments, nor can we predict the
likelihood, type or effect of any restrictions. Trade restrictions, including increased tariffs or quotas, embargoes, safeguards and customs restrictions against apparel items, as well as U.S. or
foreign labor strikes, work stoppages or boycotts, could increase the cost or reduce the supply of apparel to our vendors, and we would expect the costs to be passed along in increased prices to us,
which could hurt our profitability.
We may be subject to sales tax in states where we operate our direct business, which could have a material adverse effect on our business, financial condition and results of
operations.
Under current state and federal laws, we are not required to collect and remit sales tax in states where we sell through our Internet or catalog
channels. Legislation is pending in some states that may require us to collect and remit sales tax on direct sales or institute use tax reporting. If states pass sales or use tax laws, we may need to
collect and remit current and past sales tax and could face greater exposure to income tax and franchise taxes in these states. Any increase in sales tax or use tax reporting on our Internet sales
could discourage customers from purchasing through our catalog or Internet channels, which could have a material adverse effect on our results of operations.
Increases in the minimum wage could have a material adverse effect on our business, financial condition, results of operations and cash flows.
From time to time, legislative proposals are made to increase the minimum wage in the U.S., as well as a number of individual states. Wage rates for
many of our employees are at or slightly above the minimum wage. As federal or state minimum wage rates increase, we may need to increase not only the wage rates of our minimum wage employees, but
also the wages paid to our other hourly employees as well. Any increase in the cost of our labor could have a material adverse effect on our operating costs, financial condition and results of
operations.
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Maintaining and improving our financial controls and the requirements of being a public company may strain our resources, divert management's attention and affect our
ability to attract and retain qualified board members.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Nasdaq Marketplace Rules. The
requirements of these rules and regulations have significantly increased our legal and financial compliance costs, including
costs associated with the hiring of additional personnel, and made some activities more difficult, time-consuming or costly.
The
Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. Public disclosure of our business results and
other company information could make us less competitive in the market place as our competition gains a better understanding of how we do business.
The
Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Ensuring that we have adequate
internal financial and accounting controls and procedures in place is a costly and time-consuming effort that needs to be reevaluated frequently. Section 404 of the Sarbanes-Oxley
Act requires annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered certified public accounting firm auditing.
The assessment of the effectiveness of our internal control over financial reporting will begin with fiscal year 2011. Both we and our independent certified registered public accounting firm will be
testing our internal controls in connection with the Section 404 requirements and could, as part of that documentation and testing, identify material weaknesses, significant deficiencies or
other areas for further attention or improvement. Implementing any appropriate changes to our internal controls may require specific compliance training for our directors, officers and employees,
require the hiring of additional finance, accounting and other personnel, involve substantial costs to modify our existing accounting systems and take a significant period of time to complete. These
changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements
on a timely basis, could increase our operating costs and could materially impair our ability to operate our business. Moreover, effective internal controls are necessary for us to produce reliable
financial reports and are important to help prevent fraud. As a result, our failure to satisfy the requirements of Section 404 on a timely basis could result in the loss of investor confidence
in the reliability of our financial statements, which in turn could cause the market value of our common stock to decline.
Risks Related to this Offering and Ownership of Our Common Stock
Concentration of ownership among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate
decisions.
Upon consummation of this offering, and assuming that no over-allotment shares are sold in this offering, our executive officers, directors and
principal stockholders will beneficially own, in the aggregate, approximately 29% of our outstanding common stock. As a result, these stockholders will be able to exercise significant control over all
matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and approval of corporate transactions and will have significant control over
our management and policies. Of the eight members of our board of directors two are principals of WestView and one member is a managing director of PineBridge.
WestView
is expected to hold approximately 9.9% of our outstanding common stock, entities advised by PineBridge are expected to hold approximately 9.4% of our outstanding common stock and members of
the Rosenbaum family are expected to hold approximately 9.9% of our outstanding
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common
stock, upon completion of this offering and assuming that no over-allotment shares are sold in this offering. As a result of these ownership positions, these stockholders could take actions
that have the effect of delaying or preventing a change-in-control of us or discouraging others from making tender offers for our shares, which could prevent stockholders from
receiving a premium for their shares. These actions may be taken even if other stockholders oppose them. The concentration of voting power among WestView and entities advised by PineBridge may have an
adverse effect on the price of our common stock. The interests of these stockholders may not be consistent with your interests as a stockholder.
Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the price at which you
purchase them.
Shares of our common stock were sold in our initial public offering in October 2010 at a price of $13.00 per share, and our common stock has
subsequently traded between approximately $12.00 and $21.00 per share. There has been a public market for our common stock for only a short period of time. An active, liquid and orderly market for our
common stock may not be sustained, which could depress the trading price of our common stock. An inactive market may also impair our ability to raise capital by selling shares. In addition, the market
price of our common stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including:
•
fashion trends and changes in consumer preferences;
•
changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular,
in the retail sales environment;
•
the timing and level of expenses for new store openings and remodels and the relative proportion of our new stores to
existing stores;
•
the performance and successful integration of any new stores that we open;
•
the success of our direct business and sales levels;
•
changes in our source mix and vendor base;
•
changes in key personnel;
•
entry into new markets;
•
our levels of comparable store sales;
•
actions and announcements by us or our competitors or significant acquisitions, divestitures, strategic partnerships,
joint ventures or capital commitments;
•
inventory shrinkage beyond our historical average rates;
•
changes in operating performance and stock market valuations of other retail companies;
•
investors' perceptions of our prospects and the prospects of the retail industry;
•
fluctuations in quarterly operating results, as well as differences between our actual financial and operating results and
those expected by investors;
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•
the public's response to press releases or other public announcements by us or third parties, including our filings with
the SEC;
•
announcements relating to litigation;
•
guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
•
changes in financial estimates or ratings by any securities analysts who follow our common stock, our failure to meet
these estimates or failure of those analysts to initiate or maintain coverage of our common stock;
•
the development and sustainability of an active trading market for our common stock;
•
future sales of our common stock by our officers, directors and significant stockholders;
•
other events or factors, including those resulting from information technology system failures and disruptions,
hurricanes, war, acts of terrorism, other natural disasters or responses to these events; and
•
changes in accounting principles.
These
and other factors may lower the market price of our common stock, regardless of our actual operating performance. As a result, our common stock may trade at prices significantly below the
offering price.
In
addition, the stock markets, including The Nasdaq Global Market, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity
securities of many retail companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation,
we could incur substantial costs and our resources and the attention of management could be diverted from our business.
Future sales of our common stock, or the perception in the public markets that these sales may occur, may depress our stock price.
Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could
adversely affect the price of our common stock and could impair our ability to raise capital through the sale of additional shares. Upon completion of this offering, we will have approximately
15,505,677 shares of common stock outstanding. All of the 5,750,000 shares of common stock sold in our initial public offering are, and the 5,000,000 shares of common stock (or 5,750,000 shares if the
underwriters exercise their option to purchase additional shares in full) sold in this offering will be, freely tradable without restriction under the Securities Act, except for any shares of our
common stock that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which will be restricted securities under the
Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.
We
and each of our officers and directors as well as all of the selling stockholders have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of the shares of
our common stock or securities convertible into or exchangeable for shares of our common stock during the period from the date of this prospectus continuing through the date 90 days after the
date of this
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prospectus,
without the prior written consent of Piper Jaffray & Co. See "Underwriting" for a more detailed description of the terms of these "lock-up" arrangements. Shares
of common stock subject to these lock-up arrangements may be sold in the public market 90 days after the date of this prospectus, subject to applicable volume and other limitations imposed
under federal securities laws. See "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling shares of our common stock after this offering. Sales of a
substantial number of shares in the public market, or the threat of a substantial sale, could cause the market price of our common stock to decrease significantly.
In
the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could
constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in
additional dilution to you.
Anti-takeover provisions in our charter documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
Our certificate of incorporation and by-laws contain provisions that may make the acquisition of our company more difficult without the approval of
our board of directors. These provisions, among other things:
•
establish a classified board of directors so that not all members of our board of directors are elected at one time;
•
authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may
be issued without stockholder approval, and which may include super-majority voting, special approval, dividend or other rights or preferences superior to the rights of the holders of common stock;
•
prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our
stockholders;
•
provide that our board of directors is expressly authorized to make, alter or repeal our by-laws; and
•
establish advance notice requirements for nominations for elections to our board of directors or for proposing matters
that can be acted upon by stockholders at stockholder meetings.
These
anti-takeover provisions and other provisions under Delaware law, together with the concentration of ownership of our common stock discussed above under "Concentration of ownership
among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions," could discourage, delay or prevent a
transaction involving a change-in-control, even if doing so would benefit our stockholders. These provisions could also discourage proxy contests and make it more difficult for
you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire.
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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could
decline.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our
business. If one or more of the analysts who cover us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or
more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline.
We do not expect to pay any cash dividends for the foreseeable future.
The continued operation and growth of our business will require substantial cash. Accordingly, we do not anticipate that we will pay any cash
dividends on shares of our common stock for the foreseeable future. Because we are a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating
subsidiaries. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, contractual
restrictions relating to indebtedness we may incur, restrictions imposed by applicable law and other factors our board of directors deems relevant. Accordingly, if you purchase shares in this
offering, realization of a gain on your investment will depend on the appreciation of the price of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future
should not purchase our common stock.
Our actual operating results may differ significantly from our guidance.
From time to time, we release guidance regarding our future performance that represents our management's estimates as of the date of release. This
guidance, which consists of forward-looking statements, is prepared by our management and is qualified by, and subject to, the assumptions and the other information contained or referred to in the
release. Our guidance is not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our independent registered public
accounting firm nor any other independent expert or outside party compiles or examines the guidance and, accordingly, no such person expresses any opinion or any other form of assurance with respect
thereto.
Guidance
is based upon a number of assumptions and estimates that, while presented with numerical specificity, is inherently subject to significant business, economic and competitive uncertainties and
contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. We generally state possible outcomes
as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested
ranges. The principal reason that we release this data is to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any
projections or reports published by any such outside analysts or investors.
Guidance
is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual
results. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results will vary from the guidance and the variations may be
material. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that the data is forecast. In light of the foregoing, investors are
urged to put the guidance in context and not to place undue reliance on it.
Any
failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this prospectus could result in the actual operating results being
different than the guidance, and such differences may be materially adverse.
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Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans,
objectives and expectations for our business operations and financial performance and condition. Any statements that are not of historical facts may be deemed to be forward-looking statements. You can
identify these statements by words such as "aim," "anticipate," "assume," "believe," "could," "due," "estimate," "expect," "goal," "intend," "may," "objective," "plan," "potential," "positioned,"
"predict," "should," "target," "will," "would" and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements are based on current
expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management's beliefs and assumptions. These statements are not guarantees of future
performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All of our forward-looking statements are subject to risks
and uncertainties that may cause our actual results to differ materially from our expectations. Factors that may cause such differences include, but are not limited to, the risks described under "Risk
Factors," including:
•
our ability to identify and respond to new and changing fashion trends, customer preferences and other related factors;
•
failure to execute successfully our growth strategy;
•
changes in consumer spending and general economic conditions;
•
changes in the competitive environment in our industry and the markets we serve, including increased competition from
other retailers;
•
failure of our new stores or existing stores to achieve sales and operating levels consistent with our expectations;
•
the success of the malls and shopping centers in which our stores are located;
•
our dependence on a strong brand image;
•
failure of our direct business to grow consistent with our growth strategy;
•
failure of our information technology systems to support our business;
•
our dependence upon key executive management or our inability to hire or retain additional personnel;
•
disruptions in our supply chain and distribution facility;
•
our indebtedness and lease obligations;
•
our reliance upon independent third-party transportation providers for all of our product shipments;
•
hurricanes, natural disasters, unusually adverse weather conditions, boycotts and unanticipated events;
31
Table of Contents
•
the seasonality of our business;
•
increases in costs of fuel, or other energy, transportation or utilities costs and in the costs of labor and employment;
•
the impact of governmental laws and regulations and the outcomes of legal proceedings;
•
restrictions imposed by our indebtedness and lease obligations on our current and future operations;
•
our failure to maintain effective internal controls;
•
our inability to protect our trademarks or other intellectual property rights; and
•
increased costs as a result of being a public company.
We
derive many of our forward-looking statements from our own 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, or cautionary statements, are disclosed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in this prospectus. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary
statements contained in this prospectus as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all
forward-looking statements made in this prospectus in the context of these risks and uncertainties.
This
prospectus also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry
and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties, some of which may not be publicly available.
This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of
uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates. While we believe that these publications, studies and surveys are reliable, we have not
independently verified the data contained in them.
Potential
investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking
statements. These forward-looking statements speak only as of the date of this prospectus. Unless
required by law, we do not intend to update or revise any forward-looking statements publicly to reflect new information or future events or otherwise. You should, however, review the factors and
risks we describe in the reports we will file from time to time with the SEC after the date of this prospectus. See "Where You Can Find More Information."
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Table of Contents
USE OF PROCEEDS
We estimate that our net proceeds from this offering, based on the sale of 100,000 shares of our common stock at an assumed offering price of
$             per share, which is the midpoint of the price range set forth on the cover of this prospectus, after deducting the underwriting discounts and commissions and estimated
offering
expenses payable by us, will be approximately $             . We intend to use the net proceeds to pay for our expenses incurred in connection with this offering and the balance to
provide funds for
working capital and other general corporate purposes.
We
will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.
MARKET PRICE OF COMMON STOCK
Our common stock has been listed on The NASDAQ Global Market under the symbol BODY since our initial public offering on October 14, 2010.
Before then, there was no public market for our common stock. The following table sets forth the high and low sales prices of our common stock per share, as reported by The NASDAQ Global Market.
High
Low
2010
2010 Fourth Quarter (beginning October 14, 2010)
$
15.75
$
11.98
2011
2011 First Quarter (through January 26, 2011)
$
21.30
$
14.11
On January 26, 2011, the closing price as reported on The NASDAQ Global Market of our common stock was $18.02. As of January 10, 2011, we estimate
that we had approximately 18 holders of record of our common stock.
DIVIDEND POLICY
We did not declare or pay dividends on our common stock for our fiscal years 2008, 2009 and 2010. We do not expect to pay dividends on our common
stock for the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be retained and used in the operation and growth of our business. Any future
determination to pay dividends will be at the discretion of our board of directors, subject to compliance with applicable law and any contractual provisions, including under agreements for
indebtedness that we may incur, that restrict or limit our ability to pay dividends, and will depend upon, among other factors, our results of operations, financial condition, capital requirements and
other factors that our board of directors deems relevant. Because we are a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which
may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under future indebtedness we may incur.
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Table of Contents
CAPITALIZATION
The following table sets forth our cash, cash equivalents and capitalization as of October 2, 2010:
•
on an actual basis; and
•
on a pro forma as adjusted basis to give effect to the following:
•
the sale of 100,000 shares of common stock at an assumed offering price of $             per share,
which is the
midpoint of the price range on the cover of this prospectus, after the deduction of the underwriting discounts and commissions and the estimated offering expenses payable by us;
•
the sale by us of 3,333,333 shares of our common stock on October 14, 2010 at an initial public offering price of
$13.00 per share, after deducting estimated underwriting discounts, commissions and offering expenses payable by us;
•
the repayment of all outstanding indebtedness under our senior credit facility;
•
the redemption of our non-convertible, non-voting Series C preferred stock;
•
the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock;
•
the payment by us of up to an aggregate of $1.0 million to specified employees, including certain named executive
officers, under a success bonus plan triggered upon completion of our initial public offering;
•
an amendment to our certificate of incorporation to increase our authorized capital stock to 150,000,000 shares of common
stock and 5,000,000 shares of undesignated preferred stock; and
•
a 25.40446 -for- 1 stock split of our common stock, which occurred on October 13, 2010.
Our
capitalization following the completion of this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read this
table together with our consolidated financial statements and the related notes appearing elsewhere in this prospectus and the sections of this prospectus titled "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Use of Proceeds" and "Selected Consolidated Financial and Operating Data."
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Table of Contents
As of October 2, 2010
(1)
Actual
Pro Forma
As Adjusted
(unaudited)
(in thousands, except share and
per share amounts)
Cash and cash equivalents
$
5,823
$
Long-term debt:
Senior credit facility
31,518
—
Redeemable preferred stock:
Preferred stock, Series D, $0.001 par value: no shares authorized, issued or outstanding, actual; no shares authorized,
 no shares issued and outstanding, on a pro forma as adjusted basis
(2)
—
—
Preferred stock, Series C, $0.001 par value: 30,000 shares authorized, issued and outstanding, actual; no shares
authorized, no shares issued and outstanding, on a pro forma as adjusted basis
3,531
—
Preferred stock, Series A, $0.001 par value: 325,000 shares authorized, 308,820 shares issued and outstanding, actual;
no shares authorized, no shares issued and outstanding, on a pro forma as adjusted basis
31,080
—
Preferred stock, Series B, $0.001 par value: 175,000 shares authorized, 158,386 shares issued and outstanding, actual;
no shares authorized, no shares issued and outstanding, on a pro forma as adjusted basis
15,540
—
Undesignated preferred stock, $0.001 par value: no shares authorized, no shares issued or outstanding, actual; 5,000,000
shares authorized, no shares issued and outstanding, on a pro forma as adjusted basis
(3)
—
—
Stockholders' deficit:
Common stock, $0.001 par value: 19,053,345 shares authorized, 203,235 shares issued and outstanding, actual; 150,000,000
shares authorized, 15,505,677 shares issued and outstanding, on a pro forma as adjusted basis
(4)
—
Additional paid-in capital
531
Accumulated deficit
(30,117
)
Total stockholders' (deficit) equity
(29,586
)
Total capitalization
$
84,398
$
(1)
Does
not include options to purchase 1,094,094 shares of common stock outstanding under our Plan. Of the 1,094,094 shares of common stock
outstanding under our Plan, 98,260 shares of our common stock (or 196,516 shares of common stock if the underwriters' over-allotment is exercised in full) will be issued pursuant to the
exercise of vested stock options held by certain of our selling stockholders in order to participate in this offering.
(2)
In
exchange for certain letters of credit we approved the conditional authorization of up to 61,000 shares of Series D preferred
stock in the event of a draw on those letters of credit. No draw has been made and no shares of Series D preferred stock have ever been authorized or issued as of the date hereof. Since the
credit facility related to these letters of credit was terminated on October 20, 2010, no issuance of Series D preferred stock will occur.
(3)
Represents
shares of preferred stock that our board of directors have the authority to issue, without further action by our stockholders, in
one or more series under the terms of our certificate of incorporation. See "Description of Capital Stock—Preferred Stock" for more information.
(4)
As
of October 2, 2010, the par value of our issued and outstanding common stock was inconsequential.
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Table of Contents
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The following selected consolidated financial data for each of the years ended December 29, 2007, January 3, 2009, and
January 2, 2010, and consolidated balance sheet data as of January 3, 2009 and January 2, 2010, have been derived from our audited consolidated financial statements and related
notes, which are included elsewhere in this prospectus. The selected consolidated financial data for each of the years ended December 31, 2005 and December 30, 2006, and the consolidated
balance sheet data as of December 31, 2005, December 30, 2006 and December 29, 2007, have been derived from our audited consolidated financial statements that do not appear in
this prospectus. The selected consolidated income statement data for the thirty-nine weeks ended October 3, 2009 and October 2, 2010 have been derived from our unaudited consolidated
financial statements and related notes, which are included elsewhere in the prospectus.
On
October 1, 2006, the acquisition by Body Central of all of the outstanding capital stock of Body Shop of America, Inc. and Catalogue Ventures, Inc. was completed. As a result
of this acquisition, Body Shop of America, Inc. and Catalogue Ventures, Inc. became our wholly owned subsidiaries. As a result of the 2006 Transaction, on October 2, 2006, we
began a new basis of accounting. As a result of that change in our basis of accounting, the 2006 financial reporting periods presented below include the predecessor period of Body Central reflecting
approximately 39 weeks of operating results of its now
wholly owned subsidiaries from January 1, 2006 to October 1, 2006 and approximately 13 weeks of operating results for the successor period from October 2, 2006 to
December 30, 2006. Body Central had no assets, liabilities or operations prior to the 2006 Transaction and therefore the results for all periods prior to October 2, 2006 reflect results
of our predecessors. Due to the significance of the 2006 Transaction, the impact of purchase accounting and the change in our corporate structure that occurred in 2006, the financial information for
all successor periods is not comparable to that of the predecessor periods presented in the accompanying table. As part of the 2006 Transaction, Body Central also acquired Rinzi Air, LLC, of
which Body Shop of America, Inc. was the sole member. On March 6, 2008, Rinzi Air, LLC, transferred its only asset to a third party and on October 20, 2010 we dissolved the
entity.
In
the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments
necessary for the fair presentation of our financial position and results of operations for these periods. The consolidated selected financial data set forth below should be read in conjunction with
our consolidated financial statements, the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. The
historical results presented below are not necessarily indicative of the results to be expected for any future period and the results for any interim period may not necessarily be indicative of the
results that may be expected for a full year.
We
operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to December 31st. The reporting
periods contained in our audited financial statements included in this prospectus contain 52 weeks of operations in fiscal year 2007, which ended December 29, 2007, 53 weeks of
operations in fiscal year 2008, which ended January 3, 2009, and 52 weeks of operations in fiscal year 2009, which ended January 2, 2010.
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Table of Contents
Predecessor
Successor
Fiscal Year
Ended
39 Weeks
Ended
Thirteen Weeks
Ended
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 31,
2005
(1)
September 30,
2006
(1)
December 30,
2006
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(in thousands, except share, per share and operating data)
Statement of Income Data:
Net revenues
(2)
$
171,804
$
136,767
$
51,137
$
195,911
$
191,824
$
198,834
$
145,647
$
176,288
Cost of goods sold
(3)
117,289
94,323
36,226
140,334
137,982
139,145
103,678
118,358
Gross profit
$
54,515
$
42,444
$
14,911
$
55,577
$
53,842
$
59,689
$
41,969
$
57,930
Selling, general and administrative expenses
37,291
30,606
12,310
51,832
45,555
46,567
33,550
40,621
Depreciation and amortization
4,246
2,928
1,044
5,469
5,357
4,678
3,518
3,510
Impairment of long-lived assets
—
—
—
2,428
936
196
—
—
Goodwill impairment
—
—
—
33,962
—
—
—
—
Income (loss) from operations
12,978
8,910
1,557
(38,114
)
1,994
8,248
4,901
13,799
Interest expense, net of interest income
(416
)
(600
)
1,174
4,215
4,329
3,956
2,985
2,581
Other expense (income), net
82
192
(145
)
238
(493
)
(128
)
(157
)
(105
)
Income (loss) before income taxes
13,312
9,318
528
(42,567
)
(1,842
)
4,420
2,073
11,323
Noncontrolling interest
(4)
1,550
3,850
—
—
—
—
—
—
Provision for (benefit from) income taxes
223
126
206
(3,237
)
(890
)
1,640
769
4,260
Net income (loss)
$
11,539
$
5,342
$
322
$
(39,330
)
$
(952
)
$
2,780
$
1,304
$
7,063
Net income (loss) per common share
Basic
$
11.54
$
5.34
$
1.58
$
(194.10
)
$
(5.42
)
$
12.94
$
5.86
$
34.20
Diluted
$
11.54
$
5.34
$
0.03
$
(194.10
)
$
(5.42
)
$
.23
$
0.11
$
0.57
Weighted average common shares outstanding
Basic
1,000,000
1,000,000
203,235
203,235
203,235
203,235
203,235
203,235
Diluted
1,000,000
1,000,000
12,072,352
203,235
203,235
12,173,978
12,157,584
12,447,411
Pro Forma net income per common share
(5)
Basic
$
0.36
$
0.58
Diluted
$
0.35
$
0.57
Pro Forma weighted average common shares outstanding
(5)
Basic
14,861,730
14,861,730
Diluted
14,963,364
15,236,797
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Table of Contents
Predecessor
Successor
Fiscal Year
Ended
39 Weeks
Ended
Thirteen Weeks
Ended
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 31,
2005
September 30,
2006
December 30,
2006
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
Operating Data (unaudited):
Revenues:
Stores
$
156,180
$
117,506
$
44,700
$
164,411
$
156,924
$
165,331
$
118,800
$
148,980
Direct
15,624
19,261
6,437
31,500
34,900
33,503
26,847
27,308
Net revenues
$
171,804
$
136,767
$
51,137
$
195,911
$
191,824
$
198,834
$
145,647
$
176,288
Stores:
Comparable store sales change
(6)
12.7
%
3.3
%
(9.6
)%
(4.6
)%
(8.0
)%
4.9
%
4.3
%
14.8
%
Number of stores open at end of period
163
172
176
188
180
185
179
204
Sales per gross square foot
$
237
$
164
$
61
$
206
$
204
$
207
$
154
$
170
Average square feet per store
4,045
4,170
4,176
4,246
4,283
4,312
4,319
4,289
Total gross square feet at end of period (in thousands)
659
717
735
798
771
798
773
875
Direct:
Number of catalogs circulated (in thousands)
9,000
9,500
3,000
16,000
20,300
20,500
17,200
18,300
Number of pages circulated (in millions)
612
646
204
1,088
1,380
1,394
1,170
1,244
Capital expenditures (in thousands)
$
2,876
$
4,348
$
1,969
$
9,656
$
2,640
$
4,809
$
2,725
$
5,494
Predecessor
Successor
December 31,
2005
September 30,
2006
December 30,
2006
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(in thousands)
Balance Sheet Data:
Cash and cash equivalents
$
25,082
$
7,309
$
9,353
$
5,372
$
4,002
$
7,226
$
706
$
5,823
Working capital
30,494
17,588
12,125
192
(2,698
)
(1,967
)
(3,512
)
(1,217
)
Total assets
63,967
56,326
125,385
87,390
77,727
79,209
75,527
84,398
Long-term debt, less current portion
—
—
49,500
43,250
38,250
33,000
34,500
25,518
Redeemable preferred stock
—
—
46,620
49,738
49,888
50,038
50,001
50,151
Stockholders' equity (deficit)
39,333
29,150
719
(38,701
)
(39,689
)
(36,891
)
(38,498
)
(29,586
)
Cash Flow Data:
Net cash provided by operating activities
$
18,030
$
7,713
$
5,814
$
7,175
$
4,220
$
13,018
$
2,179
$
10,823
(1)
The
fiscal year ended December 31, 2005 and the thirty-nine weeks ended September 30, 2006 do not reflect the 25.40446-for-1
stock split which occurred on October 13, 2010.
(2)
Consists
of net sales as well as shipping and handling fees.
(3)
Includes
direct cost of purchased merchandising, freight, occupancy, distribution costs, catalog costs, buying costs and inventory shrinkage.
(4)
The
fiscal year ended December 31, 2005 and the 39 weeks ended September 30, 2006 includes the operating results of Body Shop
of America, Inc. Following the provisions of Financial Accounting Standards Board guidance,
Consolidation of Variable Interest Entities
, we have
consolidated the operating results of our noncontrolling interest in Catalogue Ventures, Inc. As a result of the 2006 Transaction, both Body Shop of America, Inc. and Catalogue Ventures, Inc. are
wholly owned subsidiaries.
(5)
The
pro forma net income per common share and pro forma weighted average common shares outstanding has been derived by applying pro forma
adjustments to our historical statements of operations as if this offering as well as our initial public offering were effective January 4, 2009. The pro forma net income per common share and
pro forma weighted average common shares outstanding are presented for supplemental informational purposes only. It does not purport to represent what our results of operations would have been had
this offering actually occurred on January 4, 2009.
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Table of Contents
The
pro forma adjustment to net income gives effect to the deduction of $2.5 million and $1.6 million of interest expense, net of income tax benefit, for the fiscal year ended
January 2, 2010 and the thirty-nine weeks ended October 2, 2010, respectively, related to the repayment of all outstanding indebtedness under our senior credit facility.
The
pro forma adjustments to the weighted average common shares outstanding give effect to the following:
•
the sale by us of 2,520,616 shares of our common stock in our initial offering used to repay all of our outstanding
indebtedness under our senior credit facility;
•
the sale by us of 268,770 shares of our common stock in our initial offering used to redeem our
non-convertible, non-voting Series C preferred stock; and
•
the conversion of all outstanding shares of our convertible preferred stock into 11,869,109 shares of our common stock in
connection with our initial public offering.
The
pro forma adjustments do not give effect to the following:
•
the sale by us of 100,000 shares of our common stock in this offering for working capital and general corporate
purposes;
•
the sale by us of 76,924 shares of our common stock in our initial public offering to provide funds for the payment by us
of up to an aggregate of $1.0 million to specified employees, including certain named executive officers, under a success bonus plan triggered upon completion of this offering;
•
the sale by us of 425,641 shares of our common stock in our initial public offering to provide funds for the underwriting
discounts and commissions and estimated offering expenses associated with our initial public offering; and
•
The sale by us of 41,382 shares of our common stock in our initial public offering to provide funds for working capital and
other general corporate purposes, including to grow our store base and our direct business, to convert Body Shop stores to Body Central banners, to refurbish older stores, to make technology
improvements and to make other capital expenditures.
(6)
A
store is included in comparable store sales on the first day of the fourteenth month after a store opens. For fiscal year 2008, which was a
53-week year, sales from the 53rd week were excluded from the calculation.
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Table of Contents
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our
consolidated financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set
forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should
review the "Risk Factors" and "Special Note Regarding Forward-Looking Statements" sections of this prospectus for a discussion of important factors that could cause actual results to differ materially
from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We operate on a fiscal calendar that results in a given fiscal year consisting of a 52- or 53-week period ending on the last Saturday closest to
December 31st. The reporting periods contained in the audited financial statements included in this prospectus contain 52 weeks of operations in fiscal year 2009, which ended
January 2, 2010, 53 weeks of operations in fiscal year
2008, which ended January 3, 2009, and 52 weeks of operations in fiscal year 2007, which ended December 29, 2007.
Overview
Founded in 1972, Body Central is a growing, multi-channel specialty retailer offering on-trend, quality apparel and accessories at value
prices. We operate specialty apparel stores under the Body Central and Body Shop banners, as well as a direct business comprised of our Body Central catalog and our e-commerce website at
www.bodyc.com
. We target women in their late teens and twenties from diverse cultural backgrounds, who seek the latest fashions and a flattering fit.
Our stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under our exclusive Body Central® and Lipstick® labels. We continually
update our merchandise and floor sets with an emphasis on coordinated outfits presented by lifestyle to give our customers a reason to shop our stores frequently. We believe our multi-channel strategy
supports our brand building efforts and provides us with synergistic growth opportunities across all of our sales channels.
We
attribute our historical success to our test-and-reorder strategy, which allows us to minimize our inventory risk by testing small quantities in our stores before placing
larger purchase orders for a broader roll out. We also utilize our vendors' short production lead times to increase our speed to market of our successfully tested items. Our Chief Merchandising
Officer, Beth Angelo was integral to the implementation of this strategy during her early tenure. In 2006, the founding family sold a controlling interest in the company to an investor group led by
WestView. Following the transaction, Ms. Angelo transitioned to primarily focus on our direct business.
A
new Chief Executive Officer and Chief Merchandising Officer were brought in shortly thereafter. Under the direction of this executive team, we underwent a shift away from our
test-and-reorder strategy and our core historical focus of providing the latest trends and moved toward a merchandising strategy focused on offering more basic fashions through
larger, untested inventory purchases. We believe that this strategy shifted our business away from our core customer and resulted in lower sales, excess inventory and higher levels of markdowns during
fiscal year 2007 and the first three quarters of fiscal year 2008. As an example, in the first quarter of 2007, our comparable store sales change was 6.3% and thereafter our comparable store decreased
during 2007 as a result of the shift in our strategy to a comparable stores sales change of (20.5)% in the fourth quarter of 2007.
In
January 2008, Ms. Angelo returned to her previous role as Chief Merchandising Officer and reestablished the test-and-reorder merchandising strategy that was core to
our historical success. Over
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the
course of the following three fiscal quarters, Ms. Angelo restored our historical merchandising strategy, thereby positioning our business for renewed growth, and we saw our comparable
store sales begin to steadily increase quarter over quarter. In fiscal year 2009, our current Chief Executive Officer, Allen Weinstein, joined us to implement additional improvements to our
business and refocus us on executing operational discipline. Under the leadership of our executive team, we have delivered strong results evidenced by, among other things, our nine consecutive
quarters, through the fourth quarter of 2010, of positive comparable store sales and increased net income despite a difficult economic environment. Our strong growth and operating results reflect the
initiatives taken by our management team, as well as the increasing acceptance of our merchandise and brands.
As
of January 1, 2011, we had 209 stores with an average size of approximately 4,300 square feet. Our stores are located in fashion retail venues in the South, Mid-Atlantic and
Midwest. Since the beginning of fiscal year 2005, we have increased our store base from 162 stores to 209 stores as of January 1, 2011. We opened 15 stores in fiscal year 2009 and 27 stores in
fiscal year 2010 (of which 22 were open as of October 2, 2010). We have also closed 13 stores, most of which were underperforming, from fiscal year 2009 through January 1, 2011, to
enhance our overall store performance. We expect to continue to drive our comparable store sales by keeping our merchandise on-trend, increasing the number of customer transactions,
continuing to provide our distinctive in-store experience and increasing our brand awareness. We believe these initiatives will enhance our operating margins. We also expect to continue to
drive our direct business by leveraging the capabilities of our new direct systems which were implemented during fiscal year 2010. This new technology allows us to process more orders, offer a more
dynamic merchandise presentation on our website and enhance our marketing efforts by including, among other things, the ability to target specific customer groups.
We
plan to expand our store base to take advantage of what we believe are a compelling store economic model and significant real estate opportunities. As a result of our first year sales coupled with
low store build-out costs and a low-cost operating model, our stores generate strong returns on investment. Our real estate model includes focusing on enclosed regional malls
and outlet, lifestyle and power centers in small, medium and metropolitan markets. Our new store operating model assumes average store revenue of $850,000 to $1,100,000 in the first 12 months of a
store's operations. Our average net initial cash investment is approximately $100,000, which includes $75,000 of average build-out costs, including equipment and fixtures (net of landlord
contributions), and $25,000 of initial inventory (net of payables). Our new store operating model assumes a less than one year pay back on our investment based on net operating cash flows for that
store and inclusive of lease commitments.
We
employ various marketing initiatives to develop and enhance brand recognition and to create and strengthen relationships with customers. Our marketing strategy involves a combination of
store-visual merchandising and signage updates, in-store promotions, distributions of our catalogs,
email campaigns and social networking sites. During July 2010, we launched a redesigned and enhanced website. We expect this new website will increase our ability to effectively market to and expand
our customer base. We also anticipate increasing our customer database through catalog mailings, email blasts and in-store customer sign-up campaigns. We expect these efforts to have a positive effect
on driving our net revenues.
We
are in the process of upgrading or have upgraded several of our systems to better position us for future growth. This investment includes an upgrade of our point-of-sale
software system and our systems that support our direct business and we completed the upgrade of the systems that support our direct business in July 2010. We completed our point-of-sale upgrade in
advance of the 2010 holiday shopping season. We will continue to evaluate our systems' needs and invest in
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infrastructure
as appropriate. We believe these investments will help us drive comparable store sales and new store sales and improve efficiencies in our operating margins.
While
we believe that our cash position and net cash provided by operating activities will be adequate to finance working capital needs and planned capital expenditures for at least the next
12 months, our ability to fund such cash flow needs will depend largely on our future operating performance. Accordingly, our growth strategies may be limited by our future operating
performance.
We
believe our business strategy will continue to offer significant opportunities, but it also presents risks and challenges. These risks and challenges include, but are not limited to, that we may
not be able to to effectively anticipate, identify and respond to changing fashion trends, or that we may not be able to find desirable locations for new stores or that we may not be able to
effectively manage our operations, which have grown rapidly. See "Risk Factors" for other important factors that could impact us. We seek to ensure that addressing these risks does not divert our
management's attention from continuing to build on the strengths that we believe have driven the growth of our business. We believe our focus on enhancing the desirability of our fashions, improving
our in-store shopping experience and upgrading our catalog and website capabilities, all while maintaining our customer service, will be integral to our ongoing growth.
How We Assess the Performance of Our Business
In assessing the performance of our business, we consider a variety of operational and financial measures. The key measures for determining how our
business is performing are net revenues, comparable store and non-comparable store sales, direct sales through
our catalog and e-commerce channels, gross profit margin and selling, general and administrative expenses.
Net Revenues
Net revenues consist of sales of our merchandise from comparable stores and non-comparable stores, and direct sales through our catalog
and e-commerce channels, including shipping and handling fees charged to our customers. Net revenues from our stores and direct business reflect sales of our merchandise less estimated
returns and merchandise discounts.
Store Sales
There may be variations in the way in which some of our competitors and other apparel retailers calculate "comparable" or "same store" sales. We
include a store in comparable store sales on the first day of the fourteenth month after a store opens. Non-comparable store sales include sales not included in comparable store sales (for
example, the first two months of a new store's sales) and sales from closed stores. Measuring the change in year-over-year comparable store sales allows us to evaluate how our
store base is performing. Various factors affect comparable store sales, including:
•
consumer preferences, buying trends and overall economic trends;
•
our ability to identify and respond effectively to fashion trends and customer preferences;
•
changes in competition;
•
changes in our merchandise mix;
•
changes in pricing levels and average unit price;
•
the timing of our releases of new merchandise;
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•
the level of customer service that we provide in our stores;
•
our ability to source and distribute products efficiently; and
•
the number of stores we open and close in any period.
Opening
new stores is an important part of our growth strategy. We expect a significant percentage of our net revenues to come from non-comparable store sales. Accordingly, comparable
store sales is only one element we use to assess the success of our growth strategy.
Purchases
of apparel and accessories are sensitive to a number of factors that influence the levels of consumer spending, including economic conditions and the level of disposable consumer income,
consumer debt, interest rates and consumer confidence. Our business is somewhat seasonal and as a result, our revenues fluctuate. In addition, our revenues in any given quarter can be affected by
timing of holidays, the weather and similar matters.
Direct Sales
We offer direct sales through our catalogs and through our e-commerce website,
www.bodyc.com
, which accepts orders directly from our
customers. We believe the circulation of our catalogs and access to our website increases our
reputation and brand recognition with our target customers and helps support the strength of our store operations.
Gross Profit
Gross profit is equal to our net revenues minus our cost of goods sold. Gross profit margin measures gross profit as a percentage of our net
revenues. Cost of goods sold includes the direct cost of purchased merchandise, distribution costs, all freight costs incurred to ship merchandise to our stores and our direct customers, costs
incurred to produce and distribute our catalogs, store occupancy costs, buying costs and inventory shrinkage. The components of our cost of goods sold may not be comparable to those of other
retailers.
Our
cost of goods sold is greater in higher volume periods because cost of goods sold generally increases as net revenues increase. Changes in the mix of our products, such as changes in the
proportion of accessories, may also impact our cost of goods sold. We review our inventory levels on an ongoing basis in order to identify slow-moving merchandise and take appropriate
markdowns to clear these goods. The timing and level of markdowns are not seasonal in nature, but are driven by customer acceptance of our merchandise. If we misjudge sales levels and/or trends, we
may be faced with excess inventories and be required to mark down our prices for those products in order to sell them. Significant markdowns have reduced our gross profit in some prior periods and may
do so in future periods.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include payroll and other
expenses related to operations at our corporate headquarters and store operations. These expenses do not generally vary proportionally with net revenues. As a result, selling, general and
administrative expenses as a percentage of net revenues are usually higher in lower volume periods and usually lower in higher volume periods. The components of our selling, general and administrative
expenses may not be comparable to those of other retailers. We expect that our selling, general and administrative expenses will increase in future periods due to our continuing store growth,
continuing growth in our direct business and, in part, due to additional legal, accounting, insurance and other expenses that we expect to incur as a result of recently
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becoming
a public company. Among other things, compliance with the Sarbanes-Oxley Act and related rules and regulations have and are expected to continue to result in significant additional legal and
accounting costs.
Results of Operations
The following tables summarize key components of our results of operations for the periods indicated, both in dollars and as a percentage of
revenues:
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(dollars in thousands)
Net revenues
$
195,911
$
191,824
$
198,834
$
145,647
$
176,288
Cost of goods sold
140,334
137,982
139,145
103,678
118,358
Gross profit
55,577
53,842
59,689
41,969
57,930
Selling, general and administrative expenses
51,832
45,555
46,567
33,550
40,621
Depreciation and amortization
5,469
5,357
4,678
3,518
3,510
Impairment of long-lived assets
2,428
936
196
—
—
Goodwill impairment
33,962
—
—
—
—
(Loss) income from operations
(38,114
)
1,994
8,248
4,901
13,799
Interest expense, net of interest income
4,215
4,329
3,956
2,985
2,581
Other expense (income), net
238
(493
)
(128
)
(157
)
(105
)
(Loss) income before income taxes
(42,567
)
(1,842
)
4,420
2,073
11,323
(Benefit from) provision for income taxes
(3,237
)
(890
)
1,640
769
4,260
Net (loss) income
$
(39,330
)
$
(952
)
$
2,780
$
1,304
$
7,063
Operating Data (unaudited):
Stores:
Comparable store sales change
(4.6
)%
(8.0
)%
4.9
%
4.3
%
14.8
%
Number of stores open at end of period
188
180
185
179
204
Sales per gross square foot (
in whole dollars
)
$
206
$
204
$
207
$
154
$
170
Total gross square feet at end of period (
in thousands
)
798
771
798
773
875
Direct:
Number of catalogs circulated (in thousands)
16,000
20,300
20,500
17,200
18,300
Number of pages circulated (in millions)
1,088
1,380
1,394
1,170
1,244
Percentage of Revenues:
Net revenues
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Cost of goods sold
71.6
71.9
70.0
71.2
67.1
Gross profit
28.4
28.1
30.0
28.8
32.9
Selling, general and administrative expenses
26.5
23.7
23.4
23.0
23.0
Depreciation and amortization
2.8
2.8
2.4
2.4
2.0
Impairment of long-lived assets
1.2
0.5
0.1
0.0
0.0
Goodwill impairment
17.3
0.0
0.0
0.0
0.0
(Loss) income from operations
(19.4
)
1.1
4.1
3.4
7.8
Interest expense, net of interest income
2.2
2.3
2.0
2.0
1.5
Other expense (income), net
0.1
(0.3
)
(0.1
)
(0.1
)
(0.1
)
(Loss) income before income taxes
(21.7
)
(0.9
)
2.2
1.4
6.4
(Benefit from) Provision for income taxes
(1.6
)
(0.4
)
0.8
0.5
2.4
Net (loss) income
(20.1
)%
(0.5
)%
1.4
%
0.9
%
4.0
%
We have determined our operating segments on the same basis that we use internally to evaluate performance. Our operating segments are our stores and our direct
business, which have been aggregated into one reportable financial segment. We aggregate our operating segments because they have a similar class of customer, nature of products, nature of production
process and distribution methods, as well as similar economic characteristics.
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A
summary of revenues by sales channel is set forth below:
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(dollars in thousands)
Revenues
Store
$
164,411
$
156,924
$
165,331
$
118,800
$
148,980
Direct
31,500
34,900
33,503
26,847
27,308
Net revenues
$
195,911
$
191,824
$
198,834
$
145,647
$
176,288
The following table summarizes the number of stores open at the beginning of the period and at the end of the period:
Fiscal Year Ended
Thirty-Nine
Weeks Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
Number of stores open at beginning of period
176
188
180
180
185
New stores
15
6
15
7
22
Store closings
(3
)
(14
)
(10
)
(8
)
(3
)
Number of stores open at end of period
188
180
185
179
204
Comparison of the Thirty-Nine Weeks Ended October 2, 2010 Compared to the Thirty-Nine Weeks Ended October 3, 2009
Net Revenues
Net revenues increased by $30.6 million, or 21.0%, to $176.3 million for the thirty-nine weeks ended October 2, 2010
from $145.6 million for the thirty-nine weeks ended October 3, 2009. This increase resulted from an increase in non-comparable store sales and comparable store
sales in addition to a slight increase in our direct sales as further described below.
Store
sales increased $30.2 million, or 25.4%, to $149.0 million for the thirty-nine weeks ended October 2, 2010 from $118.8 million for the
thirty-nine weeks ended October 3, 2009. The increase in store sales resulted in part from a 25.5% increase in the number of customer transactions, driven in part by 25 new store
openings, net of store closings, since October 3, 2009, partially offset by a decline in the average number of items per sale. Comparable store sales increased $16.7 million, or 14.8%,
for the thirty-nine weeks ended October 2, 2010 compared to an increase of 4.3% for the thirty-nine weeks ended October 3, 2009. Non-comparable store
sales increased $13.5 million for the thirty-nine weeks ended October 2, 2010 compared to the thirty-nine weeks ended October 3, 2009. There were 167
comparable stores and 37 non-comparable stores open at October 2, 2010.
Direct
sales, including shipping and handling fees, from our direct business increased $461,000, or 1.7%, to $27.3 million for the thirty-nine weeks ended October 2, 2010
from $26.8 million for the thirty-nine weeks ended October 3, 2009, due to an increase in the number of catalogs circulated offset by a decrease in average revenue per
catalog.
Gross Profit
Gross profit increased $16.0 million, or 38.0%, to $57.9 million for the thirty-nine weeks ended October 2, 2010
from $42.0 million for the thirty-nine weeks ended October 3, 2009. As a percentage of net revenues, gross profit margin increased by 410 basis points, to 32.9%, for the
thirty-nine weeks ended October 2, 2010 from 28.8% for the thirty-nine weeks ended October 3, 2009. This increase
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was
attributable to a 120 basis point increase in merchandise margin, due primarily to decreased markdowns, and a 290 basis point decrease in freight costs, store occupancy, distribution and buying
costs as a percentage of net revenues, due primarily to an increase comparable store sales and a favorable change in store occupancy costs per store.
Selling, General and Administrative Expense
Selling, general and administrative expenses increased by $7.1 million, or 21.1%, to $40.6 million for the thirty-nine
weeks ended October 2, 2010 from $33.6 million for the thirty-nine weeks ended October 3, 2009. This increase resulted in part from a $3.5 million increase in
store operating expenses due to our store growth. As a percentage of net revenues, store operating expenses decreased to 17.3% for the thirty-nine weeks ended October 2, 2010 from
18.5% for the thirty-nine weeks ended October 3, 2009.
General
and administrative expenses increased $3.6 million primarily related to payroll, payroll-related expenses and professional fees, including fees associated with the implementation of
certain information technology systems, including a new point-of-sale software system. As a percentage of net revenues, general and administrative expenses increased to 5.7%
for the thirty-nine weeks ended October 2, 2010 from 4.5% for the thirty-nine weeks ended October 3, 2009.
As
a percentage of net revenues, selling, general and administrative expenses was 23.0% for both the thirty-nine weeks ended October 2, 2010 and thirty-nine weeks ended
October 3, 2009.
Depreciation and Amortization Expense
Depreciation and amortization decreased $8,000, or 0.2%, to $3.5 million for the thirty-nine weeks ended October 2, 2010
from $3.5 million for the thirty-nine weeks ended October 3, 2009. As a percentage of net revenues, depreciation and amortization decreased 40 basis points to 2.0% for the
thirty-nine weeks ended October 2, 2010 from 2.4% for the thirty-nine weeks ended October 3, 2009, as a result of an increase of our comparable store sales.
Interest Expense, Net of Interest Income
Interest expense, net of interest income, decreased by $404,000, or 13.5%, to $2.6 million for the thirty-nine weeks ended
October 2, 2010 from $3.0 million for the thirty-nine weeks ended October 3, 2009, which reflects our lower average borrowings under our senior credit facility for the
thirty-nine weeks ended October 2, 2010.
Provision for Income Taxes
Provision for income taxes increased $3.5 million to $4.3 million for the thirty-nine weeks ended October 2, 2010
from $769,000 for the thirty-nine weeks ended October 3, 2009, which was attributable to a $9.3 million increase in income before income taxes in addition to the effective
tax rate increase of 50 basis points to 37.6% for the thirty-nine weeks ended October 2, 2010 from 37.1% for the thirty-nine weeks ended October 3, 2009 due
primarily to reduced tax credits expected to be utilized to reduce our fiscal year 2010 income tax liability.
Net Income
Net income increased $5.8 million to $7.1 million for the thirty-nine weeks ended October 2, 2010 from
$1.3 million for the thirty-nine weeks ended October 3, 2009 due to the factors discussed above.
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Comparison of Fiscal Year 2009 to Fiscal Year 2008
Net Revenues
Net revenues increased $7.0 million, or 3.7%, to $198.8 million in fiscal year 2009 from $191.8 million in fiscal year 2008,
which included an additional 53rd week. This 53rd week contributed $3.6 million in additional revenue in fiscal year 2008. The overall increase in revenues resulted from an
increase in non-comparable store sales and an increase in comparable store sales, partially offset by a decrease in our direct sales as further described below.
Store
sales increased $8.4 million, or 5.4%, to $165.3 million in fiscal year 2009 from $156.9 million in fiscal year 2008. This increase in revenues from store sales was
primarily attributable to a 5.2% increase in the number of customer transactions, driven in part by five new store openings, net of store closings, since January 3, 2009, and an increase in the
average number of items per sale. Comparable store sales increased $7.2 million, or 4.9%, in fiscal year 2009 compared to an 8.0% decrease in comparable store sales in fiscal year 2008.
Non-comparable store sales increased $1.2 million in fiscal year 2009 compared to fiscal year 2008. There were 164 comparable stores and 21 non-comparable stores open at
January 2, 2010.
Direct
sales, including shipping and handling fees, from our direct business decreased $1.4 million, or 4.0%, to $33.5 million in fiscal year 2009 from $34.9 million in fiscal
year 2008, primarily as a result of a temporary failure in the system for our direct business in June 2009, and resulting loss of customer sales data, which prevented us from fulfilling existing and
new sales orders.
Gross Profit
Gross profit increased $5.8 million, or 10.9%, to $59.7 million in fiscal year 2009 from $53.8 million in fiscal year 2008. As a
percentage of revenues, gross profit margin increased by 1.9%, to 30.0%, in fiscal year 2009 from 28.1% for fiscal year 2008. This increase was a result of a 70 basis point increase in the merchandise
margin and a 1.2% decrease in freight costs, store occupancy, distribution and buying costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $1.0 million, or 2.2%, to $46.6 million in fiscal year 2009 from
$45.6 million in fiscal year 2008. Store operating expenses increased by $1.4 million due to our store growth. As a percentage of revenues, store operating expenses were 18.7% for both
fiscal years. General and administrative expenses decreased $376,000 primarily as a result of a reduction in professional fees, partially offset by an increase in payroll and payroll-related expenses.
As a percentage of revenue, general and administrative expenses decreased 40 basis points to 4.7% in fiscal year 2009 from 5.1% in fiscal year 2008.
As
a percentage of revenues, selling, general and administrative expenses decreased 30 basis points to 23.4% for fiscal year 2009 from 23.7% for fiscal year 2008, as a result of the above factors.
Depreciation and Amortization
Depreciation and amortization decreased $679,000, or 12.7%, to $4.7 million in fiscal year 2009 from $5.4 million in fiscal year 2008.
As a percentage of revenues, depreciation and amortization decreased 40 basis points to 2.4% in fiscal year 2009 from 2.8% in fiscal year 2008. This decrease was a result of an adjustment for
impairment of long-lived assets during the fourth quarter of fiscal year 2008 partially offset by depreciation and amortization on new capital expenditures.
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Impairment of Long-Lived Assets
Impairment of long-lived assets was $196,000 for fiscal year 2009 and $936,000 for fiscal year 2008, related to fair value adjustments on
the carrying value of store assets.
Interest Expense, Net of Interest Income
Interest expense, net of interest income, decreased by $373,000, or 8.6%, to $4.0 million in fiscal year 2009 from $4.3 million in
fiscal year 2008. This decrease reflects our lower average outstanding debt resulting from quarterly payments under our senior credit facility in the amount of $5.0 million in fiscal year 2009.
(Benefit from) Provision for Income Taxes
(Benefit from) provision for income tax increased $2.5 million to a provision of $1.6 million in fiscal year 2009 from an income tax
benefit of $890,000 for fiscal year 2008. This increase was attributable to a $6.3 million increase in income before income taxes partially offset by the effective tax rate decrease to 37.1%
for fiscal year 2009 from a tax benefit of 48.3% in fiscal year 2008.
Net (Loss) Income
Net (loss) income increased $3.7 million to net income of $2.8 million in fiscal year 2009 from a net loss of $952,000 in fiscal year
2008 due to the factors discussed above.
Comparison of Fiscal Year 2008 to Fiscal Year 2007
Net Revenues
Net revenues decreased $4.1 million, or 2.1%, to $191.8 million in fiscal year 2008, which included an additional 53rd week
ended on January 3, 2009, from $195.9 million in fiscal year 2007. This 53rd week contributed $3.6 million in additional revenue in fiscal year 2008. The overall decrease
in revenues resulted from a reduction in comparable store sales partially offset by an increase in non-comparable store sales and an increase in our direct sales as further described
below.
Store
sales decreased $7.5 million, or 4.6%, to $156.9 million in fiscal year 2008 from $164.4 million in fiscal year 2007. The decrease in store sales was driven in part by eight
store closings, net of store openings, since December 29, 2007, partially offset by an increase in the average number of items per sale and an increase of 40 basis points in the number
of customer transactions. Comparable store sales decreased $12.2 million, or 8.0%, in fiscal year 2008 compared to a 4.7% decrease in fiscal year 2007.
Non-comparable store sales increased $4.7 million in fiscal year 2008 compared to fiscal year 2007. There were 159 comparable stores and 21 non-comparable stores open at January 3,
2009.
Direct
sales, including shipping and handling fees, from our direct business increased $3.4 million, or 10.8%, to $34.9 million in fiscal year 2008 from $31.5 million in fiscal year
2007. This increase was due to an expanded distribution of our catalogs and an increase in our customer base resulting from our efforts to increase brand awareness partially offset by a decrease in
revenue per book.
Gross Profit
Gross profit decreased $1.7 million, or 3.1%, to $53.8 million in fiscal year 2008 from $55.6 million in fiscal year 2007. As a
percentage of revenues, gross profit margin decreased 30 basis points to 28.1% in fiscal year 2008 from 28.4% for fiscal year 2007. This decrease was a result of a 1.6% increase in freight, store
occupancy, distribution and buying costs partially offset by a 1.3% increase in the merchandise margin.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $6.3 million, or 12.1%, to $45.6 million in fiscal year 2008 from
$51.8 million in fiscal year 2007. Store operating expenses decreased $2.4 million due to the number of stores closed in fiscal year 2008. As a percentage of revenues, store operating
expenses decreased to 18.7% in fiscal year 2008 from 19.5% in fiscal year 2007. General and administrative expenses decreased $3.9 million primarily as a result of a reduction in payroll and
payroll-related expenses, travel and relocation expenses and temporary employees. As a percentage of revenues, general and administrative expenses decreased by 1.9% to 5.1% in fiscal year 2008 from
7.0% in fiscal year 2007.
As
a percentage of revenues, selling, general and administrative expenses decreased by 2.8% to 23.7% for fiscal year 2008 as compared to 26.5% in fiscal year 2007, as a result of the above factors.
Depreciation and Amortization
Depreciation and amortization decreased $112,000, or 2.0%, to $5.4 million in fiscal year 2008 from $5.5 million in fiscal year 2007.
Depreciation and amortization as a percentage of revenues remained constant at 2.8% in fiscal years 2008 and 2007.
Impairment of Long-Lived Assets
Impairment of long-lived assets was $936,000 for fiscal year 2008 and $2.4 million in fiscal year 2007 related to fair value
adjustments on the carrying value of store assets.
Goodwill Impairment
Goodwill impairment of $34.0 million was recorded in fiscal year 2007 related to our store operations as a result of the slowing economy,
repositioning of our merchandise strategy, competition with other retailers and operating performance of the stores. See the discussion in "—Overview" for further understanding of changes
that led to the goodwill impairment of our store operations.
Interest Expense, Net of Interest Income
Interest expense, net of interest income, increased $114,000, or 2.7%, to $4.3 million in fiscal year 2008 from $4.2 million in fiscal
year 2007, which was attributable to an increase in the weighted average borrowings under our senior credit facility.
Benefit from Income Taxes
Benefit from income taxes benefit decreased $2.3 million to $890,000 in fiscal year 2008 from $3.2 million in fiscal year 2007. This
was attributable to a $40.7 million reduction in losses before income tax offset by the effective tax benefit increase to 48.3% in fiscal year 2008 from a 7.6% benefit in fiscal year 2007. The
effective tax benefit was lower for fiscal year 2007 as a result of the impairment of $34.0 million of goodwill, which was not deductible for income tax purposes.
Net loss
Net loss decreased $38.4 million, or 97.6%, to a net loss of $952,000 in fiscal year 2008 from a net loss of $39.3 million in fiscal
year 2007 due to the factors discussed above.
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Quarterly Results and Seasonality
The following table sets forth our historical unaudited quarterly results of operations as well as certain operating data for each of our most recent
eleven fiscal quarters expressed as a percentage of our revenues. This unaudited quarterly information has been prepared on the same basis as our annual audited financial statements appearing
elsewhere in this prospectus, and includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary to present fairly the financial information for the fiscal
quarters presented.
The
quarterly data should be read in conjunction with our audited and unaudited consolidated financial statements and the related notes appearing elsewhere in this prospectus.
Quarterly Results of Operations
Fiscal Year 2008
Fiscal Year 2009
Fiscal
Year 2010
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
First
Quarter
Second
Quarter
Third
Quarter
(in thousands, except percentages)
Net revenues
(1)
$
44,783
$
50,921
$
44,518
$
51,602
$
48,628
$
52,159
$
44,860
$
53,187
$
58,173
$
61,172
$
56,943
Gross profit
11,850
14,458
12,656
14,878
14,128
14,956
13,635
16,970
19,740
20,015
18,175
(Loss) income from operations
(1,295
)
1,288
332
1,669
1,397
2,137
1,367
3,347
6,220
4,646
2,933
Net (loss) income
$
(2,428
)
$
787
$
(674
)
$
1,363
$
273
$
747
$
284
$
1,476
$
3,389
$
2,331
$
1,343
Year-over-Year (Decrease)/Increase
Net revenues
(13.4
)%
(7.5
)%
(0.4
)%
16.1
%
8.6
%
2.4
%
0.8
%
3.1
%
19.6
%
17.3
%
26.9
%
Gross profit
(27.4
)
(16.5
)
(6.7
)
77.5
19.2
3.4
7.7
14.1
39.7
33.8
33.3
Percent of Annual Results
Net revenues
23.3
%
26.6
%
23.2
%
26.9
%
24.5
%
26.2
%
22.6
%
26.7
%
—
(2)
—
(2)
—
(2)
Gross profit
22.0
26.9
23.5
27.6
23.7
25.1
22.8
28.4
—
—
—
(Loss) income from operations
(64.9
)
64.6
16.6
83.7
16.9
25.9
16.6
40.6
—
—
—
Net (loss) income
(255.0
)
82.7
(70.8
)
143.2
9.8
26.9
10.2
53.1
—
—
—
Operating Data
Comparable store sales change
(18.5
)%
(13.3
)%
(5.8
)%
8.7
%
8.2
%
3.7
%
1.1
%
6.7
%
17.7
%
9.4
%
17.6
%
(1)
Consists
of net sales as well as shipping and handling fees.
(2)
Our
"Percent for Annual Results" are only available for completed fiscal years.
Seasonality
Due to the seasonal nature of the retail industry, we have historically experienced and expect to continue to experience some fluctuations in our
revenues and net income. We recognized 36.6% and 63.4% of our positive net income in the second and fourth quarters of fiscal year 2008, respectively (in our first and third quarters, we had negative
net income). In fiscal year 2009, we recognized 26.9% and 53.1% of our net income in the second and fourth quarters, respectively (a year in which net income was positive for all quarters). Revenues
generated during the holiday selling season generally contribute to our relatively higher fourth quarter net income. Revenues generated around Easter and the beginning of Spring generally contribute
to the relatively higher second quarter net income. If for any reason our revenues were below seasonal norms or expectations during these quarters, our annual results of operations could be adversely
affected. The level of our working capital reflects the seasonality of our business. We expect inventory levels, along with an increase in accounts payable and
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accrued
expenses, generally to reach their highest levels in anticipation of the increased revenues during these periods.
Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations and, historically, borrowings under our senior credit facility. Our primary cash
needs are capital expenditures in connection with opening new stores, remodeling or relocating existing stores, distributing our catalogs, operating our website and the additional working capital
required for running our operations. Cash is also required for investment in our information technology systems, the planned upgrade of these systems and distribution facility enhancements. The most
significant components of our working capital are cash and cash equivalents, merchandise inventories, trade payables and other current liabilities. Our working capital position benefits from the fact
that we generally collect cash from sales to customers the same day or, in the case of credit or debit card transactions, within several days of the related sale, and we typically have up to
60 days to pay our merchandise vendors, depending on the applicable vendor terms.
On
October 13, 2010, we amended our authorized capital stock to 150,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of undesignated preferred stock, par value
$0.001 per share.
On
October 14, 2010, we completed an initial public offering of common stock which included 3,333,333 new shares sold by us and 1,666,667 shares sold by our existing shareholders, raising net
proceeds of $40.3 million for us, after deducting the underwriting discounts and commissions and other offering expenses. As part of the initial public offering, our convertible Series A
and Series B preferred stock were converted into 11,869,109 shares of our common stock.
On
October 20, 2010, we repaid all amounts owed under the term loan facilities of our senior credit facility and redeemed our non-convertible, non-voting Series C
preferred stock using proceeds from our initial public offering. There were no amounts outstanding under our revolving credit facility of our senior credit facility at the time of repayment.
Subsequently, the senior credit facility was terminated. We are currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of
2011. There is no guarantee that such a facility will be entered into on commercially reasonable terms or at all.
On
November 2, 2010, the underwriters in our initial public offering closed the full exercise of their over-allotment option to purchase an additional 750,000 shares of our common
stock from our selling stockholders. We did not receive any proceeds from the sale of shares in the over-allotment by the selling stockholders.
We
believe that our cash position, as well as any net proceeds from this offering will be adequate to finance our working capital needs and planned capital expenditures for at least the next
12 months. Although we are currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011, there is no guarantee
that we could enter into such a facility on commercially reasonable terms or at all, and even if we do enter into such a facility, our ability to fund our cash flow needs beyond the next
12 months will depend largely on our future operating performance. We assess future operating performance by looking at a number of metrics, primarily our net revenues, comparable store and
non-comparable store sales, direct sales through our catalog and e-commerce channels, gross profit margin, and selling, general and administrative expenses. Our liquidity
position is affected by many metrics beyond our control but is specifically directly affected by these performance metrics.
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Our
cash and cash equivalents balance decreased $1.4 million to $5.8 million as of October 2, 2010, from $7.2 million as of January 2, 2010. Components of this
change in cash for the thirty-nine weeks ended October 2, 2010 and October 3, 2009 as well as fiscal years 2009, 2008 and 2007 are provided below in more detail.
A
summary of operating, investing and financing activities are shown in the following table:
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(in thousands)
Provided by operating activities
$
7,175
$
4,220
$
13,018
$
2,179
$
10,823
Used for investing activities
(9,656
)
(2,340
)
(4,794
)
(2,725
)
(5,494
)
Used for financing activities
(1,500
)
(3,250
)
(5,000
)
(2,750
)
(6,732
)
(Decrease) increase in cash / cash equivalents
$
(3,981
)
$
(1,370
)
$
3,224
$
(3,296
)
$
(1,403
)
Operating Activities
Operating activities consist of net (loss) income adjusted for non-cash items, including depreciation and amortization, deferred income
taxes and the effect of other working capital requirements, as summarized in following table:
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(in thousands)
Net (loss) income
$
(39,330
)
$
(952
)
$
2,780
$
1,304
$
7,063
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
5,469
5,357
4,678
3,518
3,510
Non-cash impairment charges
36,390
936
196
—
—
Deferred income taxes
(3,577
)
(275
)
1,561
(159
)
1,197
Inventory
5,850
(450
)
1,714
(1,636
)
(4,282
)
Merchandise payables
2,925
(4,041
)
(174
)
(828
)
2,540
Other working capital components
(552
)
3,645
2,263
(20
)
795
Net cash provided by operating activities
$
7,175
$
4,220
$
13,018
$
2,179
$
10,823
Net cash provided by operating activities increased $8.6 million to $10.8 million during the thirty-nine weeks ended October 2,
2010 compared to $2.2 million for the thirty-nine weeks ended October 3, 2009. This increase was attributable to a $5.8 million increase in net income, a
$1.4 million favorable change in deferred income taxes, a $722,000 improvement in our requirements for inventory, net of
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merchandise
payables, and an $815,000 decrease in our other working capital requirements. The improvements in our cash requirements for inventory were principally due to successful management of our
inventories as well as more favorable terms with our trade vendors. The improvements in our cash requirements for other working capital components are principally due to favorable tenant allowances
related to store occupancy.
The
$8.8 million improvement in net cash provided by operating activities in fiscal year 2009 compared to fiscal year 2008 is due to growth in net income of $3.7 million and a
$6.0 million decrease in our requirements for inventory, net of merchandise payables, offset by a $900,000 increase in our other working capital requirements.
The
$3.0 million reduction in cash generated from operating activities in fiscal year 2008 compared to fiscal year 2007 resulted from growth in net income, offset by non-cash
impairment adjustments, of $2.9 million, and offset by an increase of $13.3 million in our requirements for inventory, net of merchandise payables and a $7.4 million decrease in
our other working capital requirements.
Inventory,
net of merchandise payables, increased $4.5 million in fiscal year 2008 compared to a decrease of $8.8 million in fiscal year 2007. This increase was related to comparable
store sales declines in the fourth quarter of fiscal year 2007, which continued through the third quarter of fiscal year 2008, as we continued to adjust from a change in merchandising strategy
implemented during fiscal year 2007.
Investing Activities
Investing activities consist of capital expenditures for new and existing stores, as well as our investment in information technology:
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(in thousands)
Capital expenditures (excluding tenant allowances)
$
(7,381
)
$
(1,463
)
$
(3,044
)
$
(1,559
)
$
(3,153
)
Tenant allowances
(2,275
)
(1,177
)
(1,765
)
(1,166
)
(2,341
)
Proceeds from sale of assets
—
300
15
—
—
Net cash used in investing activities
$
(9,656
)
$
(2,340
)
$
(4,794
)
$
(2,725
)
$
(5,494
)
For the thirty-nine weeks ended October 2, 2010, capital expenditures, excluding tenant allowances, increased $1.6 million compared to
the thirty-nine weeks ended October 3, 2009, which increase was attributable to capital expenditures for our new point-of-sale software system, an upgrade to
our systems that support our direct business, new store construction and maintenance of existing stores.
Capital
expenditures, excluding tenant allowances, for the opening of new stores and the relocation of and maintenance on existing stores, were $3.0 million, $1.3 million and
$1.8 million in fiscal years 2007, 2008 and 2009, respectively. The remaining capital expenditures in each period were primarily for our investment in information technology systems and
distribution and corporate facility enhancements.
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In
fiscal year 2007, we invested approximately $1.8 million to replace our point-of-sale equipment in all of our stores, along with a $1.5 million investment for
our direct business to enhance our e-commerce systems.
We
anticipate that capital expenditures, excluding tenant allowances, in fiscal year 2010, will be approximately $3.9 million, including $1.3 million for 27 new stores, $900,000 for the
relocation of and maintenance of existing stores, $100,000 for maintenance of corporate facilities, and $1.6 million for investments in information technology systems, which includes the
implementation of a new point-of-sale software system for our stores and an upgrade to our systems that support our direct business.
Financing Activities
Financing activities have consisted principally of borrowings and payments on our outstanding senior credit facility:
Fiscal Year Ended
Thirty-Nine Weeks
Ended
December 29,
2007
January 3,
2009
January 2,
2010
October 3,
2009
October 2,
2010
(unaudited)
(in thousands)
Payments on long-term debt
$
(4,500
)
$
(3,250
)
$
(5,000
)
$
(2,750
)
$
(6,732
)
Proceeds from issuance of preferred stock
3,000
—
—
—
—
Net cash used for financing activities
$
(1,500
)
$
(3,250
)
$
(5,000
)
$
(2,750
)
$
(6,732
)
The $6.7 million and $2.8 million use of net cash in the thirty-nine weeks ended October 2, 2010 and October 3, 2009,
respectively, resulted from the scheduled quarterly principal repayments due under our senior credit facility. In addition, we paid an additional $3.0 million on our senior credit facility in
the thirty-nine weeks ended October 2, 2010, based on our operating results for fiscal year 2009.
In
fiscal years 2009 and 2008, $5.0 million and $3.3 million of net cash, respectively, were utilized for scheduled principal repayments due under our senior credit facility.
In
fiscal year 2007, $3.0 million in proceeds was generated from the issuance of 30,000 shares of our non-convertible, non-voting Series C preferred stock and
$4.5 million was utilized for scheduled principal payments under our senior credit facility, resulting in the $1.5 million use of net cash.
Senior Credit Facility
Effective October 1, 2006, we established a six-year, $66.5 million senior credit facility with certain lenders managed by
Dymas Funding Company, LLC. As described below, on October 20, 2010, we repaid and terminated this credit facility. This senior credit facility provided for a $24.0 million term
loan B facility, with quarterly interest payments and a maturity date of October 1, 2013, a $27.5 million term loan A facility, with quarterly principal and interest payments and a
maturity date of October 1, 2012 and a revolving credit facility that provided for advances up to $15.0 million, subject to certain limitations, and a maturity date of October 1,
2012. There were no amounts outstanding under the revolving credit facility on October 2, 2010, January 2, 2010, January 3, 2009 and December 29, 2007. There was
$1.0 million outstanding under the revolving credit facility on
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October 3,
2009. Both of the term loans and the revolving credit facility were collateralized by substantially all of our assets and a pledge of stock in our subsidiaries.
Interest
rates on our senior credit facility ranged from LIBOR plus 5.25% to LIBOR plus 5.75%, with a floor for LIBOR of 3.25%. Our borrowing capacity was limited to 70% of our total merchandise
inventory pursuant to the terms of our senior credit facility. Pursuant to Amendment No. 3 to our
senior credit facility, dated January 25, 2008, our borrowing capacity was limited to a maximum of $11.0 million. This expired on December 31, 2009 and we reverted back to a
borrowing capacity limited to 70% of our total merchandise inventory. The terms of the loan agreements contained certain restrictive covenants, which required, among other things, the maintenance of a
maximum ratio of debt to earnings before interest, taxes, depreciation and amortization, or EBITDA, a minimum fixed charge coverage ratio and maximum capital expenditures. As of October 2,
2010, we were in compliance with all financial covenants contained in the senior credit facility.
On
October 20, 2010, we repaid all amounts owing under our term loan facilities of our senior credit facility using proceeds from our initial public offering. There were no amounts outstanding
under our revolving credit facility of our senior credit facility at the time of repayment. Subsequently, the senior credit facility was terminated.
We
are in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011. There is no guarantee that such a facility will be entered
into on commercially reasonable terms or at all.
Off Balance Sheet Arrangements
We are not a party to any off balance sheet arrangements.
Contractual Obligations
We enter into long-term contractual obligations and commitments in the normal course of business, primarily debt obligations and
non-cancelable operating leases. The following table summarizes our contractual obligations as of January 2, 2010 over the periods specified.
Payments Due by Period
Total
Less than
1 year
1 - 3 years
3 - 5 years
More than
5 years
(in thousands)
Long-term debt obligations
(1)
$
38,250
$
5,250
$
12,000
$
21,000
$
—
Operating lease obligations
(2)
63,317
13,802
20,782
13,248
15,485
Merchandise accounts payable
9,078
9,078
—
—
—
Total
$
110,645
$
28,130
$
32,782
$
34,248
$
15,485
(1)
Represents
our senior credit facility. See "—Senior Credit Facility." On October 20, 2010 all amounts owed under our senior credit
facility were repaid and the facility was subsequently terminated.
(2)
Does
not include rent based on sales.
Impact of Inflation
Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of
inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition have been immaterial.
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Recent Accounting Pronouncements
In June 2009, authoritative guidance was issued which establishes the Financial Accounting Standards Board, or FASB, and the Accounting Standards
Codification, or ASC, as the source of authoritative accounting principles generally accepted in the U.S., or GAAP, recognized by the FASB to be applied by nongovernmental entities. This guidance,
which was incorporated into
Generally Accepted Accounting Principles
, is effective for annual periods ending after September 15, 2009. We adopted
the guidance for fiscal year 2009 and changed certain disclosure references. This change did not have any other impact on our consolidated financial statements.
In
August 2009, the FASB issued Accounting Standards Update (ASU) 2009-05,
Measuring Liabilities at Fair Value
(Topic 820). The objective of the new
guidance is to provide clarification for the fair value measurement of liabilities, specifically providing clarification that in circumstances in which a quoted price in an active market for an
identical liability is not available, a reporting entity is required to measure fair value using certain prescribed techniques. Techniques highlighted include using: (1) the quoted price of the
identical liability when traded as an asset; (2) quoted prices for similar liabilities or similar liabilities when traded as assets; or (3) another valuation technique that is consistent
with the principles of fair value measurements. The new guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or
adjustment to other
inputs relating to the existence of a restriction that prevents the transfer of the liability. Finally, the guidance clarifies that Level 1 fair value measurements include both a quoted price
in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active market when no adjustment to the quoted price of the asset is
required. The adoption of this guidance did not have an impact on our financial position or results of operations.
In
January 2010, the FASB issued ASU 2010-06,
Fair Value Measurements and Disclosures
(Topic 820):
Improving Disclosures
about Fair Value Measurements
. The new guidance requires disclosures of transfers in and out of Level 1 and 2 fair value measurements, including a description of the
reason for the transfer. The new guidance also calls for disclosures about the activity in Level 3 measurements by separately presenting information on purchases, sales, issuances and
settlements on a gross basis rather than a single net number. The guidance also clarifies (1) the level of disaggregation that should be used in completing disclosures about fair value
measurements and (2) the disclosures required in describing the inputs and valuation techniques used for both nonrecurring and recurring fair value measurements. This guidance became effective
for interim and annual reporting periods beginning after December 15, 2009, except for the new disclosures regarding the activity in Level 3 measurements, which became effective for
fiscal years beginning after December 15, 2010.
We
do not expect the adoption of these pronouncements to have a material impact on our financial position or results of operations.
Critical Accounting Policies
This Management's Discussion and Analysis of Financial Condition and Results of Operations has been derived from our consolidated financial
statements that were prepared in accordance with GAAP. GAAP requires management to make estimates and assumptions that affect the reported amounts of our assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, our management evaluates
its estimates and judgments, including those related to inventory valuation, property and equipment, recoverability of long-lived assets, including intangible assets, income taxes and
stock-based compensation.
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Table of Contents
Our
management bases its estimates and judgments on its historical experience and other relevant factors and assumptions it believes to be reasonable to form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources and evaluates these estimates on an ongoing basis. While we believe that the historical experience and other
factors considered provide a meaningful basis for the accounting policies applied in the preparation of the consolidated financial statements, we cannot guarantee that our estimates and assumptions
will be accurate. Actual results could differ from these estimates under different assumptions or conditions which would require us to make adjustments to these estimates in future periods.
Our
management has reviewed critical accounting policies and estimates with our audit committee. The following reflect the most critical accounting policies and significant estimates and judgments
used in the preparation of our consolidated financial statements. For a complete discussion of our significant accounting policies, refer to Note 1 of our consolidated financial statements
"Nature of Business and Summary of Significant Accounting Policies" appearing elsewhere in this prospectus.
Revenue Recognition
We recognize revenue at the point-of-sale or upon shipment to customers. Shipping and handling fees billed to customers for
direct sales are included in net revenues. Based on historical sales returns, an allowance for sales returns is recorded as a reduction of net revenues in the periods in which the sales are
recognized. Sales tax collected from customers is excluded from net revenues and is included as part of accrued expenses and other current liabilities on our consolidated balance sheets appearing
elsewhere in this prospectus.
We
sell gift certificates in our stores, which do not expire or lose value over periods of inactivity. We account for gift certificates by recognizing a liability at the time a gift certificate is
sold. We recognize revenue from gift certificates when they are redeemed by the customer.
Inventory Valuation
Inventories are comprised primarily of women's apparel and accessories and are stated at the lower of cost or market, on a first-in, first-out basis,
using the retail inventory method. We record merchandise receipts at the time they are delivered to our consolidator as this is the point at which title and risk of loss transfer to us. We do not
directly import any merchandise at this time.
We
review our inventory levels to identify slow-moving merchandise and generally use markdowns to clear this merchandise. We record a markdown reserve based on estimated future
markdowns related to current inventory to clear slow-moving inventory. During each accounting period, we evaluate the selling trends experienced and the related promotional events or
pricing strategies in place to sell through the current inventory levels. Markdowns may occur when inventory exceeds customer demand for reasons of style, seasonal adaptation, changes in customer
preference, lack of consumer acceptance of fashion items, competition or if it is determined that the inventory in stock will not sell at its currently ticketed price. These markdowns may have an
adverse impact on earnings, depending on the extent and amount of inventory affected. The markdown reserve is recorded as an increase to cost of goods sold in the consolidated statements of operations
appearing elsewhere in this prospectus.
We
perform physical inventory counts at all stores semi-annually. Included in the carrying value of merchandise inventories is a reserve for shrinkage. Shrinkage is estimated based on
historical physical inventory results as a percentage of sales. The estimate for shrinkage reserve can be affected by changes in merchandise mix and changes in actual shrinkage trends.
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Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is computed for financial reporting
purposes on the straight-line method using service lives ranging principally from three to fifteen years. Furniture and fixtures are typically depreciated over three to five years.
Amortization of leasehold improvements is provided on the straight-line method over the length of the lease or over the estimated useful life of the improvement, whichever is shorter. The
cost of assets sold or retired and the related accumulated depreciation or amortization is removed from the accounts with any resulting gain or loss included in net income. Major renewals and
betterments which extend service lives are capitalized, while expenditures for repairs and maintenance that do not significantly extend the life of the asset are expensed as incurred.
Impairment of Long-Lived Assets
We are exposed to potential impairment if the book value of our assets exceeds their expected future cash flows. The major components of our
long-lived assets are store fixtures, equipment and leasehold improvements. We follow FASB ASC 360,
Property, Plant
and Equipment
, which requires impairment losses to be recorded on long-lived assets used in operations whenever events or changes in circumstances indicate that the
net carrying amounts may not be recoverable. Our evaluation is performed based on estimated undiscounted future cash flows from operating activities compared with the carrying value of related assets
for the individual stores. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized as the difference between the carrying value and the estimated fair
value of the assets based on the discounted future cash flows of the assets using a rate that approximates our weighted average cost of capital.
Goodwill
Goodwill of $55.5 million was recognized on the acquisition of Body Shop of America, Inc. and Catalogue Ventures, Inc. on
October 1, 2006. We follow FASB ASC 350,
Intangibles—Goodwill and Other
, which requires that goodwill and indefinite life
intangibles are subject to an assessment of impairment at least annually. Under this guidance, we are required to compare the fair value of each reporting unit with its carrying amount to determine if
there is a potential impairment of goodwill. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill
within the reporting unit is less than its carrying value. We performed our annual impairment analysis as of January 2, 2010 using the discounted cash flow and guideline public company methods
to determine the fair value of the reporting units. Our analysis indicated that no impairment of goodwill occurred or was at-risk as of January 2, 2010 and January 3, 2009, respectively.
In fiscal year 2007, we recorded a $34.0 million impairment of goodwill related to our store operations as a result of the slowing economy, repositioning of our merchandise strategy,
competition with retailers and operating performance of our stores.
Income Taxes
Income taxes are accounted for pursuant to FASB ASC 740,
Income Taxes,
which requires that we
recognize deferred tax assets, which include net operating loss carry forwards and tax credits. Deferred income taxes are determined based on the difference between the financial reporting and tax
bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are offset by deferred tax liabilities relating to
nondeductible temporary differences. Recognition of deferred tax assets is based on management's belief that it is more likely than not that the tax benefit associated with temporary differences will
be utilized. The FASB issued guidance requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets will
not be realized. We have determined that valuation allowances against the deferred tax assets are not currently necessary.
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We
follow FASB ASC 740,
Income Taxes,
guidance on accounting for uncertainty in income taxes. The standard prescribes a recognition threshold and
measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in tax returns. In addition, the standard provides guidance on the
de-recognition, classification and disclosure of tax positions, as well as the accounting for related interest and penalties. In May 2007, the FASB amended the guidance associated with the
criteria that must be evaluated in determining if a tax position has been effectively settled and should be recognized as a tax benefit. We did not have any uncertain tax provisions recorded in our
consolidated financial statements appearing elsewhere in this prospectus.
Stock-Based Compensation
Stock-based compensation expense related to stock options was $28,000, $114,000 and $168,000 for fiscal years 2007, 2008 and 2009, respectively. We
granted options to purchase an aggregate of 368,873, 209,587 and 586,843 shares of common stock in fiscal years 2007, 2008 and 2009, respectively. In fiscal year 2010, effective with our initial
public offering, we granted options to certain of our employees and non-employee directors to purchase an aggregate of 130,000 shares of common stock with an exercise price equal to the initial
public offering price of $13.00 per share. These grants and any future stock option grants increased our stock-based compensation expense in fiscal year 2010 and in future fiscal years compared to
fiscal year 2009.
We
account for stock-based compensation in accordance with FASB ASC 718,
Compensation-Stock Compensation
, which establishes accounting for equity
instruments exchanged for employee services. Under the provisions of this statement, stock-based compensation cost is measured at the grant date fair value and is recognized as an expense on a
straight-line basis over the employee's requisite service period (generally the vesting period of the equity grant). As required under this guidance, we estimate forfeitures for options
granted which are not expected to vest. Changes in these inputs and assumptions can materially affect the measurement of the estimated fair value of our stock-based compensation expense. We estimate
the grant date fair value of stock option awards using the Black-Scholes option pricing model. For fiscal years 2008, 2009 and 2010, the fair value of stock options was estimated at the grant date
using the following weighted-average assumptions:
Fiscal Year Ended
January 3,
2009
January 2,
2010
January 1,
2011
Risk-free interest rate
1.8%
3.1%
1.5%
Expected dividend yield
0%
0%
0%
Expected volatility
66.1%
71.0%
73.7%
Weighted average expected term
6.25 years
6.25 years
6.19 years
The risk-free interest rate was determined based on the rate of Treasury instruments whose maturities are similar to those of the expected term of
the award being valued. The expected dividend yield was based on our expectations of not paying dividends on our common stock for the foreseeable future. The expected volatility incorporates
historical volatility of similar entities whose shares prices are publicly available. The weighted average expected term is based on the simplified method of estimating the option life.
As
of January 21, 2011, we had outstanding vested options to purchase approximately 495,146 shares of common stock, at a weighted average exercise price of $3.08 per share, and outstanding
unvested options to purchase 598,948 shares of common stock, at a weighted average exercise price of $5.58 per share. The per share value of each share of common stock underlying the vested and
unvested options at the dates of the grant of the options range from $0.98 to $13.00 per share.
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The
fair values of the shares at the dates of grant were originally estimated by a valuation firm that used three approaches to measure fair value: the income approach; the market approach; and the
cost approach.
The
income approach focuses on the income-producing capability of a business or asset, by incorporating the calculation of the present value of future economic benefits such as cash earnings, cost
savings, tax deductions and proceeds from disposition. Indications are developed by discounting expected cash flows to the present value at a rate of return that incorporates the risk-free
rate for the use of funds, the expected rate of inflation and risks associated with the particular investment. The discount rate selected is generally based on rates of return available from
investments of similar type and quality.
The
market approach measures value through an analysis of recent sales or offerings of comparable assets between arm's length parties. In the valuation of equity interests in business, the market
approach can be applied by utilizing one or both of the following methods:
•
The guideline public company method focuses on comparing the subject entity to guideline publicly traded entities. In
applying this method, valuation multiples are: (i) derived from historical operating data of selected guideline entities; (ii) evaluated and/or adjusted based on the strengths and
weaknesses of the subject entity relative to the selected guideline entities; and (iii) applied to the appropriate operating data of the subject entity to arrive at a value indication.
•
The similar transactions method utilizes valuation multiples based on actual transactions that have occurred in the
subject entity's industry or related industries to arrive at an indication of value. These derived multiples are then adjusted and applied to the appropriate operating data of the subject entity to
arrive at an indication of value.
•
The cost approach measures the value of an asset as the cost to reconstruct or replace it with another of like utility.
When applied to the valuation of equity interests in businesses, each item on the business' balance sheet is restated to its fair value. By deducting the fair value of the business' liabilities from
the fair value of its assets, the fair value of the equity is isolated. The approach is generally not used to value businesses operated as going concerns. The cost approach is often utilized in the
valuation of tangible assets.
As
disclosed more fully in Note 10 to our consolidated financial statements, included elsewhere in this prospectus, we granted stock options during fiscal year 2009 with a fair value of $1.27
per share. Factors that contributed to the difference between the fair value of those grants and our initial public offering price of $13.00 are:
•
the increased private company valuation that occurred subsequent to the date of the grants but previous to the initial
public offering based on earnings and cash flows;
•
the span of time between grant dates and the estimated time of the initial public offering;
•
the fact that private company valuations are normally based on historical performance while a public company's valuation
is based in large part on future expected earnings;
•
the uncertainty of our future cash flow and earnings at the date of the grants;
•
increased same store sales when compared with the same periods from previous years;
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•
increased average sales per store;
•
the continued growth in our store base; and
•
our expanded geographic footprint.
Quantitative and Qualitative Disclosures about Market Risk
Our principal market risk relates to interest rate sensitivity, which is the risk that future changes in interest rates will reduce our net income or
net assets. Our senior credit facility's interest rates ranged from LIBOR plus 5.25% to LIBOR plus 5.75% with interest paid quarterly with a floor for LIBOR of 3.25%. At October 2, 2010, the
weighted average interest rate on our borrowings was 8.4%. Based on a sensitivity analysis at October 2, 2010, assuming average outstanding borrowings during fiscal year 2009 of
$40.7 million, a 100 basis point increase in interest rates would increase our annual interest expense by approximately $407,000.
On
October 20, 2010, we repaid all amounts owing under our term loan facilities of our senior credit facility using proceeds from our initial public offering. Subsequently, the senior credit
facility was terminated. We are currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011. We anticipate the interest
rate for our new revolving credit facility will vary based on LIBOR plus a fixed rate. Consequently, our principal market risk will likely continue to relate to interest rate sensitivity. We expect
that our new revolving
credit facility will have prevailing market rates, however, there is no guarantee that such a facility could be entered into on commercially reasonable terms or at all.
Given
our exposure to variable interest rates, during fiscal year 2006, we entered into an interest rate swap agreement that involved the receipt of variable rate payments based on the
one-month LIBOR rate in exchange for 5.22% fixed rate payments over the life of the swap agreement without an exchange of the underlying notional amount of $25.0 million. The
differential to be paid or received is accrued and recognized as an adjustment to interest expense as interest rates change. The interest rate swap was not designated as a cash flow hedge and,
accordingly, it is reflected at fair value on the consolidated balance sheet and the related change in fair value is reflected in interest expense. The agreement terminated on November 13,
2008. The net effect of the agreement was approximately $199,000 of expense for fiscal year ended January 3, 2009.
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BUSINESS
Our Company
Founded in 1972, Body Central is a growing, multi-channel, specialty retailer offering on-trend, quality apparel and accessories at value
prices. We operate specialty apparel stores under the Body Central and Body Shop banners, as well as a direct business comprised of our Body Central catalog and our e-commerce website at
www.bodyc.com
. We target women in their late teens and twenties from diverse cultural backgrounds who seek the latest fashions and a flattering fit. Our
stores feature an assortment of tops, dresses, bottoms, jewelry, accessories and shoes sold primarily under our exclusive Body Central® and Lipstick® labels. We continually
update our merchandise and floor sets with an emphasis on coordinated outfits presented by lifestyle to give our customers a reason to shop our stores frequently.
We
believe our multi-channel strategy supports our brand building efforts and provides us with synergistic growth opportunities across all of our sales channels. As of January 1, 2011, we had
209 stores located in fashion retail venues across 23 states in the South, Mid-Atlantic and Midwest. Our average store size is 4,300 square feet. We aim to generate customer traffic by
designing and merchandising our stores to bring the excitement and look of chic specialty stores. By allocating our capital to areas that we believe achieve the largest impact per dollar spent, such
as in-store marketing graphics, store layout, fixtures and merchandise displays, instead of more expensive structural and architectural improvements, we believe we create an exciting look
for our stores while maintaining low build-out costs. We believe our prices compare favorably to other specialty stores and regional department stores.
Our History
We opened our first Body Shop retail store in 1973 in Jacksonville, Florida, where our corporate headquarters is located. Our current business is
focused on opening Body Central stores and developing the Body Central and Lipstick brands and on moving away from the use of the Body Shop name for our stores. Under the leadership of our founders,
members of the Rosenbaum family, we grew to approximately 175 stores and established our direct business.
In
October 2006, members of the Rosenbaum family sold a controlling interest in Body Central to a group of outside investors led by WestView Capital Partners. In October 2010, we completed our initial
public offering and our common stock was listed on The Nasdaq Global Market under the symbol BODY. In recent years, we have completed numerous initiatives that have strengthened our business and
positioned us for future growth, including:
•
Enhanced Executive Team.
We hired Allen Weinstein as our
President and Chief Executive Officer in 2009. Mr. Weinstein has brought more than 30 years of retail experience and has introduced a number of changes to improve our business, including
a focus on our competitive advantages and operational discipline. In addition, Beth Angelo returned as Chief Merchandising Officer in January 2008. Ms. Angelo has reestablished the
merchandising strategy that was core to our historical success and has enhanced the depth of our marketing and merchandising teams. During 2007, Richard Walters joined as our Chief Financial Officer.
Mr. Walters has brought more than 20 years of retail experience and has enhanced our financial reporting capabilities and implemented other operating improvements.
•
Flexible Test-and-Reorder Business
Model.
Our merchandising model allows us to identify and respond quickly to fashion trends and to bring proven styles to our stores. In
early
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2008,
we returned to our proven test-and-reorder strategy, which combined with short lead times enables us to react quickly to the latest fashion trends. Our extensive vendor
base provides us with access to a large number of designers and enables us to have the best selling products in our stores in a timely fashion. From this vast supply of new designs we can select
merchandise to test, which we believe has the distinctive Body Central look, feel and fit. This model allows us to maximize full-price sales and reduce our inventory risk.
•
Refined Real Estate Model.
In 2008, we enhanced our real
estate model by introducing additional structure and analysis to our site selection process. Our real estate committee has instituted a rigorous process for determining new store locations based on
projected sales potential, investment returns and key performance indicators of competitors combined with site visits. We adhere to our selection methodology and do not pursue expansion opportunities
if they do not meet our new store financial and site criteria. Our flexible model has proven successful in hot, warm and cold climates, in small, medium and metropolitan markets and in many different
fashion venues. Since 2008, our average new store performance outpaced the targeted returns in our store economic model.
Our Recent Accomplishments
Through initiatives implemented by our executive team since 2008, we have delivered strong results despite the difficult economic environment. For
instance, we have:
•
maintained positive comparable stores sales growth over the past nine quarters, through the fourth quarter of 2010,
including an increase of 4.9% for fiscal year 2009 and 14.8% for the thirty-nine weeks ended October 2, 2010;
•
opened six stores in fiscal year 2008, 15 stores in fiscal year 2009 and 27 stores in fiscal year 2010 and from fiscal
2008 through January 1, 2011, we also closed 27 stores, most of which were underperforming, for a net increase of 21 stores;
•
increased inventory turnover resulting in a meaningful reduction in markdowns and an improvement in gross margin by
approximately 190 basis points between fiscal year 2008 and fiscal year 2009;
•
improved operating margin by approximately 300 basis points between fiscal year 2008 and fiscal year 2009, primarily as a
result of reduced labor and occupancy costs, resulting in an increase in income from operations to $8.2 million for fiscal year 2009 from $2.0 million for fiscal year 2008; and
•
increased net income by $3.7 million to $2.8 million for fiscal year 2009 from a loss of $952,000 in fiscal
year 2008, and by $5.8 million to $7.1 million for the thirty-nine weeks ended October 2, 2010 from $1.3 million in the thirty-nine weeks ended October 3, 2009.
Our Market
Based on publicly available data from the NPD Group, Inc., a leading global provider of apparel market research information for tracking
consumer behavior, sales in the U.S. women's apparel market totaled approximately $104.0 billion for the 12 months ended December 2009. While our products appeal to women of varying ages
and diverse backgrounds, our core customer is a young woman in her late teens or twenties who enjoys shopping for the latest fashions. According to the U.S. Census Bureau, there were estimated to be
approximately 25.0 million women as of July 2009 between the
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ages
of 18 to 29. Our target customer represents a growing segment of the U.S. population and we believe that she spends a higher proportion of her income on fashion than the general population.
Our Strengths
We believe that the following strengths are critical to our continued success:
•
Established and Differentiated Brand.
With over
35 years of operating experience, we have built the Body Central brand around our strategy of providing the right fashion and quality, with a flattering fit at a value price. We believe our
core customer is passionate about finding current fashions typically offered in higher-end specialty stores and boutiques at value prices in an exciting store environment. We also believe
that the look and feel of our stores, in-store graphics, fashion assortment, product labeling and overall shopping experience are critical to building our brand image. All of these factors
create a unique Body Central experience.
•
Exciting Fashion Delivered at Compelling Value.
We deliver
a carefully edited selection of quality, fashionable apparel and accessories for most occasions at value prices. Our broad product assortment of apparel, jewelry, accessories and footwear allows our
customers to purchase complete outfits. We do not dictate fashion trends, but respond quickly to offer best selling styles. We maintain a fresh and exciting shopping experience by continually
refreshing our inventory through almost daily shipments to our stores. We design our windows, displays and floor sets to emphasize outfit ideas and refresh them every two to three weeks to drive
repeat store visits.
•
Multiple Sales Channel Synergies.
We complement our retail
stores with a successful direct business, which consists of both catalog and internet sales, which we have operated since 2005. We believe our catalog differentiates us from most competitors. We
select our best selling products from our stores to sell through our direct channel. We believe our multi-channel strategy builds brand awareness and drives sales across all of our channels. We
operate retail stores in 23 states and have direct sales in all 50 states. In fiscal year 2009, our two highest volume states for direct sales were outside of our retail store geography. For
the fiscal year 2009, direct sales represented approximately 16.8% of our net revenues.
•
Powerful New Store Economics.
We have a proven store model
that works across a variety of market sizes, demographics, climates, real estate venues, store sizes and mall classifications. Our flexible store format allows us to adapt to available locations and
store footprints quickly with a low investment cost that has delivered attractive returns and short payback periods. The majority of our stores range from approximately 3,200 to 5,200 square feet with
an average size of 4,300 square feet. Our average net investment for a new store, including inventory, is approximately $100,000. On average, our new stores are paying back our investment in less than
one year based on net operating cash flows for that store and inclusive of lease commitments. We believe our attractive new store economics, flexible real estate model and disciplined new store
development process allow us to opportunistically expand our store footprint on a profitable basis.
•
Disciplined Inventory Management.
We test the vast
majority of all new products on a limited basis prior to a broader roll out of the best selling items. This proven test-and-reorder strategy serves as the foundation of our
merchandising philosophy and instills discipline in our inventory management. Our ability to interpret the amount of
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merchandise
we will be able to sell to our customers by color, classification and size, combined with our vendors' short production lead time, allows us to respond rapidly to changing trends while
reducing markdowns and inventory risk.
•
Proven Management Team.
Allen Weinstein, our President
and Chief Executive Officer, Beth Angelo, our Chief Merchandising Officer and President of Direct Sales, and Richard Walters, our Chief Financial Officer, have an average of more than 25 years
of retail experience, including in design, marketing, sourcing, merchandising and real estate, and have been instrumental in our strong performance in recent years. In addition, experience and tenure
run deep within the Body Central organization. Our regional and district managers average over 20 years and 10 years of experience, respectively.
Growth Strategy
We believe we are well positioned to take advantage of opportunities to increase revenues, capture market share and drive net income growth,
including:
•
Expand Our Store Base.
We believe our concept has broad
appeal and significant expansion opportunity. With only 209 stores in 23 states as of January 1, 2011, we have considerable opportunity to expand in existing and adjacent markets. We
opened 15 stores in fiscal year 2009 and 27 new stores in fiscal year 2010. We expect to open approximately 30 to 35 new stores in fiscal year 2011. We have also closed 13 stores, most
of which were underperforming, during fiscal years 2009 and 2010 to enhance our overall store performance. We believe we can continue to open new stores at an annual rate of 15% for the next several
years.
•
Increase Comparable Store Sales and Enhance Brand
Awareness.
We plan to grow our comparable store sales by merchandising our stores with the latest fashion trends and maintaining a sharp
focus on store level execution through implementing a district manager training program, building a grading system for stores, sending more floor sets to stores and almost daily communication with
stores. We believe our ability to test products quickly and to rapidly replenish the best selling items keeps our shopping experience exciting and drives repeat customer visits and purchases. We
believe we will be able to enhance our brand awareness through our continued marketing efforts and in-store experience. In addition, we believe our extensive catalog distribution helps
build our Body Central brand. For example, in fiscal year 2009, we distributed 10 catalog editions and approximately 20.5 million catalogs totaling approximately 1.4 billion pages
to our customers. Since January 2, 2005, we have distributed 56 catalog editions to our customers.
•
Expand Operating Margin.
As we grow, we believe we can
improve our operating margin. We expect to leverage our infrastructure and buying power and streamline processes through the implementation of our new point-of-sale system and
catalog and warehouse management systems. In addition, we will continue to refine our inventory disciplines and upgrade information technology to enhance our productivity. We also believe we can
enhance our operating margins through further improvements in our store operations and labor productivity. Finally, we expect to see continued improvements in our new store economics through our
disciplined real estate model.
•
Grow Our Direct Business.
In July 2010, we implemented a
new software system for our direct business. This new system is expected to enhance the potential for growth in our
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direct
business, by allowing us to process more orders, offer a more dynamic merchandise presentation on our website and enhance our marketing efforts by including, among other things, the ability to
target specific customer groups. In addition, we recently implemented a new
point-of-sale software system which is expected to increase the synergies between our direct business and our retail stores.
Products
We offer a broad selection of apparel and accessories targeted to young women who seek the latest fashion styles at value prices. The majority of our
products are sold under our exclusive Body Central® and Lipstick® labels. We also sell a select assortment of branded merchandise, primarily denim, to complement our exclusive
label merchandise.
Our
products are presented to emphasize coordinated outfits. Our assortment of tops, dresses, bottoms, jewelry, accessories and shoes fits the many lifestyles of our customers —
casual, club, dressy and active. The majority of our products are priced under $20 and we believe represent real values. We strategically price some of our best selling tops and our jewelry to drive
customer traffic. The table below indicates our product mix as a percentage of net sales in our stores derived from our two major product categories, as of the fiscal year end for each of the years
indicated below:
2007
2008
2009
Apparel
73.4
%
75.2
%
76.6
%
Accessories
26.6
24.8
23.4
Total
100.0
%
100.0
%
100.0
%
Typically, our direct business features an edited selection of our best selling store merchandise targeted to a slightly broader customer base. We monitor
trends in our stores in order to optimize our direct merchandise offerings.
Merchandising
Our merchandising team seeks to identify current fashion trends and merchandise consistent with our brand image. We do not dictate fashion trends;
rather we focus on quickly adapting to the latest trends to provide the right merchandise at value prices every day. Our merchandising team consists of our Chief Merchandising Officer, buyers and
assistant buyers organized by product category, as well as a team focused on our direct business. Our merchandising team is responsible for selecting and sourcing our product assortments, managing
inventory levels, and allocating merchandise to stores. We build our product assortments after careful review and consideration and select products that can be displayed in our stores in a coordinated
manner to encourage our customers to purchase complete outfits.
The
merchandising team holds weekly meetings to review merchandise performance and to determine new fashion trends. We have access to the design expertise of numerous designers through our broad
vendor base who provide us with hundreds of new styles each week to review. The merchandising team selects new style items from the styles presented to us and makes necessary changes based on current
fashion trends and preferences of our customer. Before placing an order, every item is evaluated for style, quality and fit to ensure standards consistent with our Body Central brand. Our vendor
relationships provide us the ability to introduce these fashion-right products to our stores quickly. Once in the stores, our buyers use an array of retail intelligence tools to track the performance
of each item and class, and then place appropriate reorders for popular merchandise.
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Sourcing
Our test-and-reorder strategy enables us to respond rapidly to changing trends. This strategy allows us to minimize our
inventory risk by testing small quantities in our stores before placing larger purchase orders for a broader roll out. Thousands of items are tested throughout the year, but most of our sales are
generated from items that are reordered after successful testing. Our ability to make decisions quickly on successful items and our vendors' short production lead time increase our speed to market.
Therefore, our test-and-reorder strategy enables us to react quickly to evolving trends and fashion preferences, which minimizes fashion risk and inventory markdowns. We
believe this flexible sourcing model enables us to maintain a smaller percentage of our inventory on clearance.
We
do not own or operate any manufacturing facilities and buy our merchandise from third-party vendors on an order-by-order basis. We have relationships with approximately 240 U.S. vendors. Our top 10
vendors sourced approximately 45% of our merchandise in 2009, with our two largest vendors each representing approximately 11%. We continue to expand our vendor network, which gives us access to a
broad variety of merchandise from a multitude of designers and vendors at competitive prices. We believe our vendors view us as an important retail partner given our scale and market position.
We
believe our sourcing strategy has been successful because we have a balance of domestic and import production by which our U.S. vendors supply merchandise to us from both U.S. manufacturers and
foreign manufacturers that are located in such countries as China. This strategy provides us with lead times as short as four to six weeks for domestic purchases and eight to twelve weeks for imports.
Every
vendor that supplies our merchandise is required to adhere to our vendor manual, which is designed to ensure that our vendor's business is conducted in a legal, ethical and responsible manner.
Our vendor manual requires that each of our suppliers operates in compliance with applicable wage, benefit, working hours and other local laws, and forbids the use of practices such as child labor or
forced labor. See "Risk Factors—Risks Related to Our Business—We may suffer risks if our vendors fail to comply with applicable laws, including a failure to use acceptable
labor practices or if our vendors suffer disruptions in their businesses" for more information.
Sales Channels
We conduct our business through two primary sales channels: retail stores and direct, which consists of the Body Central catalog and our website,
www.bodyc.com
. We do not incorporate the information contained on, or accessible through, our website into this prospectus, and you should not consider
it part of this prospectus.
Stores
For fiscal year 2009, our stores generated net sales of $165.3 million, which represented 83.2% of our total net revenues.
As
of January 1, 2011, we had 209 retail stores under the names Body Central and Body Shop in 23 states, located primarily in the South, Mid-Atlantic and Midwest. The majority of our
stores range in size from 3,200 to 5,200 square feet, with an average of approximately 4,300 square feet. The stores we opened during fiscal year 2009 achieved annualized sales per store and sales per
gross square foot in excess of our average store sales. Our stores have historically been located in regional malls and lifestyle centers in small, medium and metropolitan markets. The nature of our
fashion merchandise enables us to be successful in markets across hot, warm and cold climates.
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The following store list shows the number of stores we operated in each state as of January 1, 2011:
State
Number of
Stores
State
Number of
Stores
Alabama
10
Maryland
5
Arizona
1
Mississippi
4
Arkansas
4
Missouri
4
Delaware
1
North Carolina
13
Florida
33
Ohio
9
Georgia
17
Oklahoma
3
Illinois
9
Pennsylvania
17
Indiana
11
South Carolina
8
Iowa
1
Tennessee
8
Kansas
2
Texas
25
Kentucky
5
Virginia
10
Louisiana
9
Total
209
Store Design and Environment
Our stores are designed to effectively present our merchandise and create an exciting atmosphere to draw customers into our store, similar to fashion
boutiques. The stores feature a vibrant look with colorful displays, popular music and aspirational lifestyle photos. Our stores are constructed to allow us to efficiently shift merchandise displays
for each season and major holiday. Our open floor design enables customers to easily view most of our merchandise. We use a large number of body forms to provide customers with full outfit ideas. Each
store's merchandise presentation, including windows, tables, gondolas and walls, is refreshed every two to three weeks to keep our shopping experience new and exciting. We believe by constantly
changing our products and floor sets with new merchandise, we give our customers a reason to shop our stores frequently.
We
maintain a consistent look in our stores, including signature blue LED storefront signs, blue mosaic tiles on the storefront columns and a well-lit selling area. High ceilings and slat
walls allow us to stock and display our merchandise effectively. We seek site locations that have a store front of at least 30 feet wide to create an inviting open floor feel, complete with
visually appealing glass line presentations.
Site Selection and Store Growth
In selecting a location for a new store, we target malls as well as lifestyle, power and outlet centers in areas with suitable demographics and where
similar fashion retailers have performed well. We have a real estate committee that utilizes a disciplined approach to analyze factors that include mall productivity, mall-specific
competitive environment, average sales of junior retailers and configuration of available space for potential new store locations. We seek prominent locations in high-traffic areas of the
mall and in close proximity to other retailers targeting juniors and young women as we have found that when we have locations in malls with certain key competitors our net sales in those stores
typically exceed the net sales of stores that are not located in proximity to those key competitors. Our flexible store format allows us to utilize both new and second-generation retail locations. We
also evaluate new store locations based on projected sales and ensure that the capital investment and estimated store level contribution satisfies our targeted return threshold. We negotiate leases
with a variety of term lengths, often with an early termination right held by us if certain sales goals are not achieved. This store selection strategy is designed to ensure consistent store
performance by adhering
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to
a rigorous selection process that ensures each potential site meets our benchmark level of profitability.
We
have currently identified a number of potential sites for new stores with appropriate market characteristics. We opened 15 new stores in fiscal year 2009 and 27 stores in fiscal year 2010.
We have also closed 13 stores, most of which were underperforming, from fiscal year 2009 through January 1, 2011 to enhance our overall store performance. In addition, our 2011 plans
include opening approximately 30 to 35 stores with approximately 15% new store growth over the next several years. Our new store model assumes average unit revenue of $850,000 to $1,100,000 in
the first 12 months and an average net initial cash investment of approximately $100,000 which includes $75,000 of average build-out costs, including equipment and fixtures (net of
landlord contributions), and $25,000 of initial inventory (net of payables). Our new store operating model assumes a less than one year pay back on our investment based on net operating cash flows
inclusive of lease commitments. Stores opened using this model have achieved average pre-tax cash return on investment in excess of 100%. Our fiscal year 2009 new stores, on average,
generated unit revenue in excess of $1,000,000 with a cash return in excess of 150% and a payback period of less than seven months.
We
have enhanced our existing store base by relocating or closing underperforming stores that we believed were not profitable or located in underperforming markets as well as remodeling our older
stores. From fiscal year 2005 through fiscal year 2010, we relocated 29 stores and we remodeled 12 of our older stores.
The
table below highlights certain information regarding our new store openings, store closings, relocations and remodels as of the fiscal year end for each of the years indicated below:
Fiscal Year Ended
2005
2006
2007
2008
2009
2010
Stores at beginning of period
162
163
176
188
180
185
Stores opened during period
8
20
15
6
15
27
Stores closed during period
(7
)
(7
)
(3
)
(14
)
(10
)
(3
)
Stores at end of period
163
176
188
180
185
209
Remodeled stores
3
3
2
4
0
0
Relocated stores
3
7
7
5
4
3
Direct
Our direct business consists of Body Central catalogs and our
www.bodyc.com
website and enables us to
reach customers by phone, mail or the Internet in all states and further build our Body Central brand. For fiscal year 2009, our direct business generated revenues of $33.5 million or
approximately 16.8% of our net revenues.
We
currently obtain customer information from both catalog and Internet customers as well as mail and email customer lists that we purchase. We currently have a database containing approximately
1,450,000 mailing addresses and approximately 1,190,000 email addresses.
We
have implemented a new system for our direct business, which is expected to enhance our capabilities and support growth. For example, this system will support a more dynamic presentation of
merchandise, allow us to process more orders and enhance our marketing efforts by including, among other things, the ability to target specific customer groups based on their shopping history and
spending habits.
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Catalog
Since the majority of our competitors do not offer a catalog, we believe our Body Central catalog differentiates us from them. We believe our catalog
reinforces the Body Central brand image and drives sales across all of our sales channels. For example, following the delivery of our catalogs, we have historically experienced an increase in orders
on our website. In fiscal year 2009, we distributed 10 catalog editions and approximately 20.5 million catalogs totaling approximately 1.4 billion pages to our customers. Since
January 2, 2005, we have distributed 56 catalog editions to our customers.
All
creative work on the Body Central catalog is developed in-house, which we believe allows us to consistently reinforce our brand image. Photography is shot both on location and in
studios, and page layout and copy writing are executed by us. Digital images are transmitted directly to outside printers, thereby reducing lead times and improving reproduction quality.
Internet
Our customers are able to purchase our merchandise through our website as well as obtain current information on our store locations. Most of our
direct business purchases are made online although often tied to a catalog distribution. As with our catalog, we believe our website reinforces our Body Central brand.
Marketing and Advertising
Our marketing approach aims to increase customer traffic and build our brand image. We believe one of our strongest marketing pieces is our Body
Central catalog. Additionally, we use email communications, in-store graphics, our website and social networking sites, such as Facebook and Twitter to achieve our marketing goals. We
often coordinate marketing efforts with the malls and shopping centers in which our stores are located.
We
believe that the look and feel of our stores, our in-store graphics, product labeling, customer service and overall shopping experience are critical to building our brand image.
Merchandise is presented with a cohesive marketing theme, often around seasons and holidays, which unifies the store presentation and emphasizes both on-trend fashions and fashion basics.
For example, we display large posters throughout each store that feature aspirational photos of our models wearing complete Body Central outfits, as well as a large number of body forms featuring
current merchandise.
Distribution
We distribute all of our merchandise from our corporate headquarters in Jacksonville, Florida, which occupies approximately 179,000 square feet,
consisting of approximately 146,000 square feet of warehouse space and approximately 33,000 square feet of office space. All of our merchandise is received, inspected, managed, stored and distributed
through our warehouse. Most of our merchandise is currently pre-ticketed and pre-assorted by our vendors, which allows us to distribute the merchandise quickly and reduce labor
costs. Merchandise is shipped almost daily to our stores to ensure a steady flow of new inventory. We believe that the capacity of our distribution center is sufficient to support our expected growth
plans for the foreseeable future.
Information Technology Systems
Our information technology systems provide support and information to our management team. We believe our systems provide us with improved
operational efficiencies, scalability, increased management control and timely reporting that allows us to identify and respond to trends in our
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business.
We use a combination of customized and industry-standard software systems to support the following functions:
•
store point-of-sale;
•
e-commerce and catalog;
•
inventory management; and
•
financial reporting.
We
are in the process of investing in and upgrading several of our systems to provide improved support of our current operations and position us for future growth.
We
recently replaced our point-of-sale software system. We expect this upgrade to enhance customer service, improve operational efficiency, increase management reporting and
control and increase synergies between our direct business and our retail stores. Our new system complements our core functions of purchasing, merchandising, finance and accounting, inventory and
order management and warehousing and distribution. This new system was deployed across all of our stores in advance of the 2010 holiday shopping season.
During
July 2010, we upgraded our systems that support our direct business and redesigned our website.
Competition
The specialty-apparel retail market is highly competitive. We compete primarily with other specialty retailers and Internet and catalog businesses
that specialize in women's apparel and accessories targeting customers in their late teens and twenties. We believe the principal basis upon which we compete is by offering quality, current fashions
at value prices. We believe that our success is dependent on are our in-store experience, our Body Central brand, our current fashions and desirable store locations.
Our
success also depends in substantial part on our ability to respond quickly to fashion trends so that we can meet the changing demands of our customers. We believe our competitors include other
specialty retailers such as Forever 21, Wet Seal, rue21, Charlotte Russe and Aéropostale. Our market is highly competitive and many of these retailers have substantially greater name
recognition, as well as financial, marketing, and other resources, and devote greater resources to the sale of their products than we do. We may face new competitors and increased competition from
existing competitors as we expand into new markets and increase our presence in existing markets.
Intellectual Property
We have registered numerous trademarks with the U.S. Patent and Trademark Office, including Body Central® and Lipstick®. In
addition, we own domain names, including
www.bodyc.com
, and we own unregistered copyright rights in our website content. We believe our material
trademarks have value, and we protect them against infringement. Our Body Central® trademark is registered until September 2013 when it is up for renewal. Our Lipstick®
trademark is registered until January 2019 when it is up for renewal and our Body Shop® trademark is up for renewal in December 2015. We will also continue to file new applications as
appropriate to protect our intellectual property rights.
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In
some regions of the U.S., our stores are located in the same malls and shopping centers as stores operated by a company doing business under the name The Body Shop®, which is a
cosmetics and beauty store. We are not affiliated with this company. In 1991, we granted this company a license to use our Body Shop trademark which is held by us in connection with retail store
services for the sale of women's apparel and apparel accessories. Under the terms of this license agreement, we granted an exclusive, royalty-free license to the cosmetics and beauty store
company to use our "Body Shop" mark for its business as follows: as a service mark for mail order retail sales of t-shirts and sweatshirts in 49 states and territories and of other apparel
in 38 states and territories; as a service mark for retail store sales of apparel in 38 states and territories; and as a trademark for apparel in 38 states and territories. This license was
non-exclusive as to certain uses and our agreements with this company permit us to continue to use our "Body Shop" mark in our stores located in Alabama, Arkansas, Florida, Georgia,
Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas. We currently operate under the Body Central banner and, in a minority of stores in certain states, we operate
under the Body Shop banner. Our current business is focused on developing the Body Central® and Lipstick® brands and we are moving away from the use of the Body Shop name in
our stores. We currently operate 61 stores under the Body Shop banner, and we expect that this number will decline as we remodel or update older stores and transition to Body Central signs and
banners.
Regulation and Legislation
We are subject to labor and employment laws, laws governing advertising and promotions, privacy laws, safety regulations, consumer protection
regulations and other laws that regulate retailers and govern the promotion and sale of merchandise and the operation of stores and warehouse facilities. We monitor changes in these laws and believe
that we are in material compliance with applicable laws.
Insurance
We use a combination of insurance and self-insurance for a number of risk management activities, including workers' compensation, general
liability, automobile liability and employee-related health care benefits, a portion of which is paid by the employees. We evaluate our insurance requirements on an ongoing basis to maintain adequate
levels of coverage.
Properties
We do not own any real property. All of our properties are leased. Our executive offices, warehouse and distribution center are located in an
approximately 179,000 square foot facility in Jacksonville, Florida. This facility is leased under a lease agreement expiring in 2016. Of the approximately 179,000 square feet in the facility,
approximately 146,000 square feet are dedicated to warehouse space and distribution. We believe that our Jacksonville facility will be able to meet our growth plans for the foreseeable future,
although we may from time to time lease new facilities or vacate existing facilities as our operations require.
As
of January 1, 2011, we had 209 retail stores in 23 states, located primarily in the South, Mid-Atlantic and Midwest. All of our stores are leased from third parties, and the
leases typically have terms of five to ten years. Some of our leases have early termination clauses, which permit the lease to be terminated by us if certain sales levels are not met in specific
periods or if a shopping center does not meet specified occupancy standards. In addition to future minimum lease payments, most of our store leases provide for additional rental payments based on our
achieving specified net sales and many provide for additional payments associated with common area maintainence, real estate, taxes and insurance. In addition, many of our lease agreements have
defined escalating rent provisions over the initial term and extensions.
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Employees
As of January 10, 2011, we had approximately 2,440 total employees. Out of our total employees, approximately 120 were based at our corporate
headquarters in Jacksonville, Florida, and approximately 2,320 were store employees. We had approximately 730 full-time employees and approximately 1,710 part-time
employees, who are primarily store employees. None of our employees are represented by a labor union, and we have had no labor-related work stoppages as of January 10, 2011. Our relationship
with our employees is a key to our success, and we believe that relationship is strong.
Seasonality
Our business is seasonal in nature reflecting increased demand during the year-end holiday season, other holidays, such as Easter, the
beginning of Spring and peak shopping periods, such as the back-to-school season. As a result of this seasonality and generally because of variation in consumer spending habits, we experience
fluctuations in net revenues and working capital requirements during the year. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Quarterly Results
and Seasonality—Seasonality" for more information.
Legal Proceedings
We are subject to various legal proceedings and claims, including employment claims, wage and hour claims, intellectual property claims, contractual
and commercial disputes and other matters that arise in the ordinary course of our business. While the outcome of these and other claims cannot be predicted with certainty, we do not believe that the
outcome of these matters will have a material adverse effect on our business, results of operations or financial condition.
Privacy Policy
In the course of our business, we collect information about our customers, including customer data submitted to us in connection with purchases of
our products at stores as well as from our direct business. We respect the privacy of our customers and take steps to safeguard the confidentiality of the information that they provide to us.
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MANAGEMENT
Executive Officers and Directors
Below is a list of our executive officers and directors and their respective ages and positions as of January 10, 2011 and a brief account of
the business experience of each of them. Our board of directors consists of eight members.
Name
Age
Position
B. Allen Weinstein
64
President, Chief Executive Officer and Director
Beth R. Angelo
43
Chief Merchandising Officer, Executive Vice President, President of Direct Sales and Director
Richard L. Walters
58
Executive Vice President, Treasurer and Chief Financial Officer
Martin P. Doolan
(1)(2)(3)
70
Chairman of the Board of Directors
Scott M. Gallin
(1)(2)
38
Director
John K. Haley
(1)(3)
59
Director
Jerrold S. Rosenbaum
74
Director
Carlo A. von Schroeter
(2)(3)
47
Director
John H. Turner
50
Director
(1)
Member
of our audit committee.
(2)
Member
of our compensation committee.
(3)
Member
of our nominating and governance committee.
Executive Officers
B. Allen Weinstein
, 64, has been our President and Chief Executive Officer since August 2009. He
joined our board of directors in June 2010. Prior to joining us, Mr. Weinstein served in various senior management positions with The Cato Corporation, a specialty retailer of women's apparel,
from 1997 to 2009, including as Executive Vice President-Chief Merchandising Officer of The Cato Corporation, from 2005, and Executive Vice President, Chief Merchandising Officer of The Cato Division,
from 1997. From 1995 to 1997, Mr. Weinstein was Senior Vice President-Merchandising of Catherines Stores Corporation, a specialty retailer of women's apparel. From 1981 to 1995, he served as
Senior Vice President of Merchandising of Bealls, Inc., a retailer of apparel and home merchandise. Since January 2010, Mr. Weinstein has served on the board of directors and
compensation committee of Destination Maternity Corporation, a Nasdaq-listed retailer of maternity apparel. He received a B.B.A. degree in finance in 1970 from the University of Houston.
Mr. Weinstein brings to our board of directors almost 30 years of experience in apparel retailing.
Beth R. Angelo
, 43, has served as our Chief Merchandising Officer and Executive Vice President since 2008. Before the 2006 Transaction she had served
the company in various capacities since 1994 and was Chief Merchandising Officer from 1996 through the 2006 Transaction. Ms. Angelo left the role as Chief Merchandising Officer in
May 2007, but returned to that position in January 2008. She has also served as our President of Direct Sales since 2005, a position which she continued between May 2007 and
January 2008 and through present day. She has served as a member of our board of directors since October 2006. Ms. Angelo also served as the sportswear merchant for Venus Swimwear, a
direct business, from 1999 to 2004 as part of a joint venture with Body Central. Ms. Angelo received a B.S. degree in business administration in 1989 from the University of Florida and an
M.B.A. degree in
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1994
from Northwestern University's Kellogg Graduate School of Management. Beth Angelo serves on the Executive Advisory Board for the David F. Miller Center for Retail Education and Research at
the University of Florida. Ms. Angelo brings to our board of directors experience in apparel retailing, including her recent 19 years in specialty retailing of women's clothing and
accessories, and valuable expertise in merchandising and marketing. Ms. Angelo is Jerrold Rosenbaum's daughter.
Richard L. Walters
, 58, has served as our Executive Vice President, Treasurer and Chief Financial Officer since January 2007. From 2001 until 2006,
Mr. Walters was the Chief Financial Officer of Hearing Healthcare Management, Inc., a retailer of hearing products and services, in Columbus, Ohio. Prior to that, from 1985 until 2000,
Mr. Walters served as Vice-President of Finance of Value City Department Stores, Inc., a discount department store chain with more than 150 stores. Mr. Walters
received a B.S. degree in accounting in 1975 from the Ohio State University and his CPA license in 1978.
Directors
The following information pertains to the directors (other than Mr. Weinstein and Ms. Angelo who are described under "Executive
Officers"), their ages, principal occupations and other directorships for at least the last five years and information regarding their specific experience, qualifications, attributes or skills. In
selecting directors, we consider factors that are in our best interests and those of our stockholders, including diversity of backgrounds, experience and competencies that our board of directors
desires to have represented. These competencies include: independence; adherence to ethical standards; the ability to exercise business judgment; substantial business or professional experience and
the ability to offer our management meaningful advice and guidance based on that experience; ability to devote sufficient time and effort to his or her duties as a director; and any other criteria
established by our board of directors together with any core competencies or technical expertise necessary for our committees. We believe that each director possesses these qualities and has
demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to us and to our board of directors.
Martin P. Doolan
, 70, has served as a member of our board of directors since October 2006 and became Chairman of our board of directors upon the
completion of our initial public offering in October 2010. Mr. Doolan is the founder and currently the Chairman and Chief Executive Officer of Multitech Enterprises, Inc., a firm
specializing in providing management expertise to companies with underperforming earnings. Mr. Doolan previously worked for Value City Department Stores, Inc., an off-price department
store chain, in various capacities, including Vice Chairman and member of the board of directors from July 1998 to January 2002, and as the President and Chief Executive Officer from July 1997 until
July 1999. This included responsibilities as the Chief Executive Officer of DSW Shoe Warehouse, Inc., a subsidiary of Value City Department Stores, Inc. and a retailer of specialty
footwear. Prior to that, Mr. Doolan served as the Chief Executive Officer of Delstar Technologies, Inc., a private company and a manufacturer of thermoplastic nets and laminates for
water, air and oil filtration, from June 1995 until June 1997, the Chief Executive Officer of Bestop, Inc., a manufacturer of automotive parts and accessories, from October 1987 until June 1995
and the Chief Executive Officer of Pilliod Furniture, Inc., a manufacturer of wood household furniture, from 1985 until 1987. Mr. Doolan has served on the board of directors and audit
committee of Lectrus Inc., a private company and manufacturer of electrical systems and metal enclosures, since January 2007, the board of directors, audit and compensation committees of Radiac
Abrasives, Inc., a manufacturer of abrasive products, from February 2007 until June 2009 and as Chairman of the board of directors of Delstar Technologies, Inc. since June 1995. He
previously served on the board of directors of American Eagle Outfitters, Inc., a public company and specialty apparel retailer traded on the New York Stock Exchange, from June 1994 until June
2004. Mr. Doolan received a B.A. degree in Business from Dallas Baptist University and associate degrees in electronics engineering from the RCA Institute and the City
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University
of New York. Mr. Doolan brings to our board of directors over 30 years of executive business experience, including many in the retail industry.
Scott M. Gallin
, 38, has served as a member of our board of directors since October 2006. Mr. Gallin has been a managing director of PineBridge
Investments, a multi-strategy investment manager, since 2002. Additionally, Mr. Gallin is an adjunct professor of finance and economics at Columbia Business School, where he has taught courses
since 2003 on private equity. He has also previously taught at the University of California, Berkeley's Haas School of Business and at the Tsinghua University in Beijing, China. Mr. Gallin has
served on the board of directors, and sits on the audit and compensation committees, of Flash Global Logistics, a global supply logistics company, a private company, since April 2007.
Mr. Gallin previously served on the boards of directors of Faith Media Holdings, a book publisher, from June 2006 to December 2006, Best Brands Corp., a distributor and manufacturer of baking
products, from December 2006 to March 2009, where he was also a member of the compensation committee, Everest Connections, a broadband communications company, from June 2006 to February 2008, where he
served on the audit and compensation committees, Medispectra Inc., a medical device company, from February 2007 to June 2007, and Legendary Pictures, a motion picture production company, from
June 2009 to September 2010, each a private company. Prior to joining PineBridge, he worked for Kluge & Co., an affiliate of Metromedia Company that is responsible for executing and
managing venture-stage, growth equity and buyout transactions. Mr. Gallin received B.A. and M.A. degrees in 1995 from the University of Pennsylvania and an M.B.A. degree in 2002 from Columbia
Business School. He was awarded a Fulbright Scholarship in 1995. As a professor and a professional with more than 14 years of experience in the private equity sector and with experience serving
on numerous boards and committees, Mr. Gallin brings to our board of directors a unique perspective and strong financial and business acumen.
John K. Haley
, 59, became a member of our board of directors and chair of our audit committee upon the completion of our initial public offering in
October 2010. From 1988 through September 2009, Mr. Haley was a partner of the international accounting firm of Ernst & Young LLP, where he worked for more than 30 years.
Mr. Haley served nearly 20 years in Ernst & Young's audit practice and from 1998 until his retirement in 2009 served in a number of leadership roles in the firm's transaction
advisory services group. Mr. Haley has served since September 2009 as a director of General Growth Properties, Inc., a landlord to approximately 31 of our stores. Mr. Haley has
over 30 years of financial experience in the audit and transaction services industry.
Jerrold S. Rosenbaum
, 74, is our founder and has served as a member of our board of directors since October 2006. Before the 2006 Transaction,
Mr. Rosenbaum served the company in various capacities since 1972 and was our President, Chief Executive Officer and Chairman of our board of directors at the time of the 2006 Transaction,
after which he served as Vice Chairman of our board of directors. He received a B.S. degree in Business Administration in 1958 from the University of Florida. As our former Chief Executive Officer and
a founder, Mr. Rosenbaum brings significant historical knowledge about our merchandise, marketing and relationships with suppliers. Mr. Rosenbaum is Beth R. Angelo's father.
Carlo A. von Schroeter
, 47, has served as a member of our board of directors since 2006. Mr. von Schroeter is a managing partner of WestView
Capital Partners, L.P., a private equity group with over $500 million in assets under management, which he co-founded in 2004. Prior to founding WestView, Mr. von
Schroeter was a general partner at Weston Presidio from 1992 to 2003, a private equity fund that manages approximately $3.3 billion in capital. Mr. von Schroeter serves on the boards of
directors of numerous private companies, including Advanced Technology Services, Inc., a provider of service solutions to manufacturers, since January 2008, SpectorSoft Corporation, a provider
of PC/Internet monitoring products, since July 2008, OneNeck IT Services Corporation, a hosting and managed services
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provider,
since June 2006, Ruffalo CODY, a fundraising and enrollment services and software provider, since June 2009 and Peerless Industrial Group, a manufacturer of industrial chains, since May
2010. Additionally, he serves on the audit and compensation committees of Advanced Technologies, Inc. and SpectorSoft Corporation and has previously served on the compensation committee of
Radiac Abrasives, Inc. from February 2007 until July 2009. Mr. von Schroeter is also a member of the board of directors of the New England Venture Capital Association, a
non-profit organization. He received a B.A. degree in mechanical engineering in 1986 from Queen's University in Canada and an M.B.A. degree in 1990 from Harvard Business School.
Mr. von Schroeter brings to our board of directors strategic insight and experience with his long career in private equity and investing in growing middle market companies for over
20 years.
John H. Turner
, 50, has served as a member of our board of directors since October 2006. Mr. Turner is a general partner of WestView Capital
Partners, L.P., where he has been investing and managing portfolio investments since 2004. Prior to joining WestView, Mr. Turner managed $650 million in
investment funds as a general partner at Norwest Mezzanine Partners and was a managing partner at Triumph Capital, a private equity group. Mr. Turner has served on the board of directors of
Titan Fitness, a private company and health club chain operator, since January 2007. Additionally, he previously served on the board of directors and audit committee of Radiac Abrasives, Inc.,
a private company and manufacturer of abrasive products, from February 2006 until July 2009. Mr. Turner received a B.A degree in economics in 1982 from the University of New Hampshire and an
M.B.A. degree in 1987 from the University of Pennsylvania's Wharton School. Mr. Turner brings to our board of directors over 20 years experience investing across all tranches of the
capital structure including senior debt, mezzanine debt and equity.
Board Composition and Election of Directors
Board Composition
Our business and affairs are managed under the direction of our board of directors. Our board of directors consists of eight members. Our by-laws
provide that our board of directors will be fixed from time to time by resolution adopted by the affirmative vote of a majority of the total directors then in office.
Our
board of directors is divided into three classes, with each director serving a three-year term and one class being elected at each year's annual meeting of stockholders. Messrs. von
Schroeter, Turner and Gallin serve as Class I directors, with an initial term expiring in 2011. Messrs. Rosenbaum and Weinstein and Ms. Angelo serve as Class II directors,
with an initial term expiring in 2012. Messrs. Doolan and Haley serve as Class III directors, with an initial term expiring in 2013.
Upon
expiration of the term of a class of directors, directors for that class will be elected for a new three-year term at the annual meeting of stockholders in the year in which the term
expires. Each director's term is subject to the election and qualification of his successor, or his earlier death, resignation or removal. Any vacancies on our board of directors may be filled only by
the affirmative vote of a majority of the directors then in office. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each
class will consist of one-third of the directors. This classification of our board of directors will make it more difficult for a third party to acquire control of our company.
Director Independence
The rules of The Nasdaq Global Market require that our board be comprised of a majority of "independent directors" and that the audit committee,
compensation committee and nominating and
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corporate
governance committee each be comprised solely of "independent directors," as defined under applicable Nasdaq rules.
Our
board of directors has determined that Messrs. Doolan, Haley, Turner, von Schroeter and Gallin each qualify as an independent director under the corporate governance rules of The Nasdaq
Global Market. In making these determinations, our board of directors affirmatively determined that Messrs. von Schroeter and Turner, who are affiliated with WestView, and Mr. Gallin,
who is affiliated with PineBridge, our largest stockholders, do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a
director. In addition, our board of directors affirmatively determined that Mr. Haley does not have any relationship that would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. In making this determination our board of directors considered that Mr. Haley sits on the board of directors of General Growth Properties, Inc., a
landlord to approximately 31 of our stores.
Board Committees
Our board of directors has established an audit committee, a compensation committee and a corporate governance and nominating committee. The
composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by our board of directors.
Audit Committee
Our audit committee consists of Messrs. Haley, Doolan and Gallin. Mr. Haley is the chairperson of our audit committee. Our audit
committee has responsibility for, among other things:
•
selecting and hiring our independent registered certified public accounting firm and approving the audit and
non-audit services to be performed by our independent registered certified public accounting firm;
•
evaluating the qualifications, performance and independence of our independent registered certified public accounting
firm;
•
monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they
relate to financial statements or accounting matters;
•
reviewing the adequacy and effectiveness of our internal control policies and procedures;
•
discussing the scope and results of the audit with the independent registered certified public accounting firm and
reviewing with management and the independent registered certified public accounting firm our interim and year-end operating results; and
•
preparing the audit committee report required by the SEC to be included in our annual proxy statement.
The
SEC and the Nasdaq Marketplace Rules require us to have all independent audit committee members within one year of the date of listing. We expect to have an entirely independent audit committee
within one year from October 14, 2010. Our board of directors has affirmatively determined that Messrs. Haley and Doolan meet the definition of "independent directors" for purposes of
serving on an audit committee under applicable SEC and the Nasdaq Marketplace Rules. Our board of directors has also determined that Mr. Gallin does not meet the criteria for independence for
purposes of serving on our audit committee set forth in Rule 10A-3 of the Exchange Act because he is
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deemed
an affiliated person of Body Central based upon his association with PineBridge, one of our largest stockholders. In addition, Mr. Haley qualifies as our "audit committee financial
expert."
Our
board of directors has adopted a written charter for our audit committee, which is available on our website at
www.bodyc.com
.
Compensation Committee
Our compensation committee consists of Messrs. Doolan, Gallin and von Schroeter. Mr. von Schroeter is the chairperson of our
compensation committee. The compensation committee is responsible for, among other things:
•
reviewing and approving compensation of our executive officers including annual base salary, annual incentive bonuses,
specific goals, equity compensation, employment agreements, severance and change-in-control arrangements and any other benefits, compensation or arrangements;
•
reviewing succession planning for our executive officers;
•
reviewing and recommending compensation goals, bonus and stock compensation criteria for our employees;
•
determining the compensation of our directors;
•
reviewing and discussing annually with management our "Compensation Discussion and Analysis" disclosure required by SEC
rules;
•
preparing the compensation committee report required by the SEC to be included in our annual proxy statement;
and
•
administrating, reviewing and making recommendations with respect to our equity compensation plans.
Our
board of directors has adopted a written charter for our compensation committee, which is available on our website at
www.bodyc.com
.
Corporate Governance and Nominating Committee
Our corporate governance and nominating committee consists of Messrs. Doolan, Haley and von Schroeter. Mr. von Schroeter is the
chairperson of our corporate governance and nominating committee.
The
corporate governance and nominating committee is responsible for, among other things:
•
assisting our board of directors in identifying prospective director nominees and recommending nominees for each annual
meeting of stockholders to our board of directors;
•
reviewing developments in corporate governance practices and developing and recommending governance principles applicable
to our board of directors;
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•
overseeing the evaluation of our board of directors and management; and
•
recommending members for each board committee of our board of directors.
Our
board of directors has adopted a written charter for our corporate governance and nominating committee, which is available on our website at
www.bodyc.com
.
Compensation Committee Interlocks and Insider Participation
During the last fiscal year, Messrs. Doolan, Gallin and von Schroeter served on our compensation committee. Messrs. Gallin and von
Schroeter both have relationships with us that require disclosure under Item 404 of Regulation S-K under the Exchange Act. See "Certain Relationships and Related Party
Transactions" for more information.
During
the past fiscal year, none of our executive officers served as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity
that has one or more executive officers who served as members of our board of directors or our compensation committee. None of the members of our compensation committee is an officer or employee of
our company, nor have they ever been an officer or employee of our company.
Code of Business Conduct and Ethics
Our code of business conduct and ethics applies to all of our employees, officers and directors, including those officers responsible for financial
reporting. Our code of business conduct and ethics is available on our website at
www.bodyc.com
. Any amendments to the code, or any waivers of its
requirements, will be disclosed on our website.
Board Leadership Structure and Board's Role in Risk Oversight
Mr. Doolan, a non-employee, independent director, serves as Chairman of our board of directors. We support separating the position
of Chief Executive Officer and Chairman to allow our Chief Executive Officer to focus on our day-to-day business, while allowing the Chairman to lead our board of directors in
its fundamental role of providing advice to, and independent oversight of, management. Our board of directors recognizes the time, effort and energy that the Chief Executive Officer is required to
devote to his position as well as the commitment required to serve as our Chairman, particularly as our board of directors' oversight responsibilities continue to grow. Our board of directors also
believes that this structure ensures a greater role for the independent directors in the oversight of our company and active participation of the independent directors in setting agendas and
establishing priorities and procedures for the work of our board of directors.
While
our by-laws and corporate governance guidelines do not require that our Chairman and Chief Executive Officer positions be separate, our board of directors believes that having separate positions
and having an independent outside director serve as Chairman is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance.
Risk
is inherent with every business and we face a number of risks as outlined in the "Risk Factors" section of this prospectus. Management is responsible for the day-to-day
management of risks we face, while our board of directors, as a whole and through its audit committee, is responsible for overseeing our management and operations, including overseeing its risk
assessment and risk management functions. Our board of directors has delegated responsibility for reviewing our policies with respect to risk assessment and risk management to our audit committee
through its charter. Our board of directors has determined that this oversight responsibility can be most efficiently performed by our audit committee as part of its overall responsibility for
providing independent, objective oversight with
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respect
to our accounting and financial reporting functions, internal and external audit functions and systems of internal controls over financial reporting and legal, ethical and regulatory
compliance. Our audit committee will regularly report to our board of directors with respect to its oversight of these important areas.
Compensation Policies and Practices and Risk Management
We consider, in establishing and reviewing our compensation philosophy and programs, whether such programs encourage unnecessary or excessive risk
taking. Base salaries are fixed in amount and consequently we do not see them as encouraging risk taking. Employees are also eligible to receive a portion of their total compensation in the form of
annual cash bonus awards. While the annual cash bonus awards focus on achievement of annual goals and could encourage the taking of short-term risks at the expense of long-term
results, the Company's annual cash bonus awards represent only a portion of eligible employees' total compensation and are tied to both corporate performance measures and individual performance. We
believe that the annual cash bonus awards appropriately balance risk with the desire to focus eligible employees on specific goals important to our success and do not encourage unnecessary or
excessive risk taking.
We
also provide named executive officers and other senior managers long-term equity awards to help further align their interests with our interests and those of our stockholders. We
believe that these awards do not encourage unnecessary or excessive risk taking since the awards are generally provided at the beginning of an employee's tenure or at various intervals to award
achievements or provide additional incentive to build long-term value and are subject to vesting schedules to help ensure that executives and senior managers have significant value tied to
our long-term corporate success and performance.
We
believe our compensation philosophy and programs encourage employees to strive to achieve both short- and long-term goals that are important to our success and building stockholder
value, without promoting unnecessary or excessive risk taking. We have concluded that our
compensation philosophy and practices are not reasonably likely to have a material adverse effect on us.
Director Compensation
In connection with our initial public offering in October 2010, we revised our director compensation structure. Our executives who are members of our
board of directors do not receive compensation from us for their service on our board of directors. Only those directors who are non-executives are eligible to receive compensation from us
for their service on our board of directors. Our non-executive directors are paid:
•
a base annual retainer of $25,000 in cash;
•
an additional $1,000 in cash to the members of the audit, compensation and nominating and corporate governance committees
for each meeting attended;
•
an additional annual retainer of $10,000 in cash to the chair of the audit committee;
•
an additional annual retainer of $5,000 in cash to the chair of the compensation committee and the corporate governance
and nominating committee; and
•
an additional annual retainer of $25,000 in cash to the chairperson of our board of directors.
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We
pay Mr. Rosenbaum $1,000 in cash per day for each real-estate site visit to assess store locations and $25,000 per year for his assessment and review of potential store locations. These
amounts are not tied to his service on our board of directors and are in addition to his $25,000 annual retainer as a member of our board of directors.
We
also provide certain non-executive directors with equity compensation for service on our board of directors and committees and we reimburse directors for reasonable expenses incurred to
attend meetings of our board of directors or committees.
The
following table sets forth information regarding the compensation of our non-executive directors for their service on our board of directors for fiscal year 2010.
Name
Fees Earned or Paid in Cash ($)
Option Awards ($)
(1)
Total ($)
Martin P. Doolan
(2)
$
11,598
$
51,891
$
63,489
Scott M. Gallin
$
6,299
$
—
$
6,299
John K. Haley
$
8,418
$
25,942
$
34,360
Jerrold S. Rosenbaum
$
5,299
$
—
$
5,299
Carlo A. von Schroeter
$
6,359
$
—
$
6,359
John H. Turner
$
5,299
$
—
$
5,299
(1)
For
stock options granted, the value set forth is the full grant date fair value, in accordance with FASB ASC 718. Valuation assumptions used
to determine the fair value of the option awards are described below:
• Risk-free interest rates
1.2%
• Expected dividend yield
0%
• Expected volatility
69.5%
• Weighted average expected term
5.5 years
(2)
Fees
are paid to the Doolan Family First Limited Partnership, of which Mr. Doolan is managing general partner, in lieu of payment to
Mr. Doolan directly.
The following table summarizes the outstanding equity awards held by our non-employee directors as of the end of fiscal year 2010:
Option Awards
Name
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Martin P. Doolan
—
6,667
(1)
$
13.00
10/14/20
John K. Haley
—
3,333
(2)
$
13.00
10/14/20
(1)
Options
granted were to the Doolan Family First Limited Partnership, of which Mr. Doolan is managing general partner, and is therefore
deemed to beneficially own the options held by it. These options vest in full on October 14, 2011.
(2)
Options
vest in full on October 14, 2011.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The purpose of this compensation discussion and analysis section is to provide information about the material elements of compensation that are paid,
awarded to, or earned by, our "named executive officers," who consist of our principal executive officer, principal financial officer and our other most highly compensated executive officer. We do not
have any other executive officers. For fiscal year 2010, our named executive officers, were:
•
Allen Weinstein, President, Chief Executive Officer and Director;
•
Beth Angelo, Chief Merchandising Officer, Executive Vice President, President of Direct Sales and Director;
and
•
Richard Walters, Executive Vice President, Treasurer and Chief Financial Officer.
Historical Compensation Decisions
Prior to our initial public offering on October 14, 2010, we were a privately held company with a relatively small number of stockholders,
including our principal stockholders, WestView and PineBridge. As a result, we were not previously subject to any stock exchange listing or SEC rules requiring a majority of our board of directors to
be independent or relating to the formation and functioning of board committees, including audit, compensation and nominating committees. Most, if not all, of our prior compensation policies and
determinations, including those made for fiscal year 2010, have been the product of discussions between our Chief Executive Officer and our compensation committee existing prior to our initial public
offering.
Our
compensation committee will review our existing compensation approach to determine whether such approach is appropriate given that we are now a public company. Accordingly, the compensation paid
to our named executive officers for fiscal year 2010 is not necessarily indicative of how we will compensate our named executive officers in the future.
Compensation Philosophy and Objectives
Our compensation committee reviews and approves the compensation of our named executive officers and oversees and administers our executive
compensation approach and initiatives. We believe that our executive compensation approach motivates our named executive officers by balancing fixed versus variable payments and cash payments versus
equity awards. Our
executive compensation approach is based upon a philosophy that is designed to:
•
attract and retain talented and experienced executives in our industry;
•
reward executives whose knowledge, skills and performance are critical to our success;
•
align the interests of our executive officers and stockholders by motivating executive officers to increase stockholder
value and rewarding executive officers when stockholder value increases; and
•
recognize the contributions each executive officer makes to our success.
The
compensation committee meets outside the presence of all of our named executive officers to consider appropriate compensation for our Chief Executive Officer. For all other named executive
officers, the compensation committee meets outside the presence of all named executive officers except our Chief Executive Officer.
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Historically,
compensation has been highly individualized, the result of arm's-length negotiations and based on a variety of informal factors including, in addition to the factors listed above, our
financial condition and available resources, our need for a particular position to be filled and the compensation levels of our other executive officers. In addition, we informally considered the
competitive market for corresponding positions within the specialty retail apparel industry. This informal consideration was based on the general knowledge possessed by members of our compensation
committee and our Chief Executive Officer regarding the compensation given to some of the executive officers of other companies in our industry through informal benchmarking. In the case of
Mr. Weinstein's compensation, the compensation committee also conducted informal benchmarking against the
competitive market and relied on the recommendation of the search firm hired to fill the Chief Executive Officer position. As a result, our compensation committee historically has applied its
discretion to make compensation decisions and set the compensation for each named executive officer on an individual basis.
Our
Chief Executive Officer will review annually with the compensation committee each named executive officer's performance and recommend appropriate base salary, cash performance awards and grants of
equity incentive awards. Based upon the recommendations from our Chief Executive Officer and in consideration of the objectives described above and the principles described below, the compensation
committee will approve the annual compensation packages of our named executive officers other than our Chief Executive Officer. The compensation committee or the full board of directors, upon
recommendation of the compensation committee, will also annually analyze our Chief Executive Officer's performance and determine his base salary, cash performance awards and grants of equity incentive
awards based on its assessment of his performance.
Elements of Compensation
Our current executive compensation approach, which was set by our compensation committee with input from our Chief Executive Officer, consists of the
following components:
•
base salary;
•
annual cash incentive awards linked to corporate and individual performance;
•
periodic grants of stock options; and
•
other executive benefits and perquisites.
Executive
compensation includes both fixed compensation (base salary, benefits and executive perquisites) and variable compensation (annual bonus and stock option grants). Each component is linked to
one or more of the compensation philosophy objectives listed above. The fixed compensation is designed to induce talented executives to join or remain with our company.
Variable
cash incentive awards are tied specifically to the achievement of our annual financial objectives and individual performance. Bonus amounts generally relate to the scope of responsibility for
each named executive officer. Our bonus awards are designed to align each executive's annual goals for his or her respective area of responsibility with the financial goals of the entire business.
The
other element to variable compensation is stock option awards. Our 2006 Equity Incentive Plan was adopted by our board of directors to award stock options to executive officers and other key
employees. Prior to our initial public offering, the grants awarded had no public market and no certain opportunity for liquidity until the completion of our initial public offering, making them
inherently long-term compensation. The awards have been used to motivate executives and employees to individually and collectively build long-term stockholder value. In
connection with our initial public
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offering,
we amended and restated our equity incentive plan, which became effective upon completion of our initial public offering.
The
compensation committee has engaged Mercer (US) Inc., a compensation consulting firm, to evaluate our fiscal 2011 compensation packages.
Base Salary
Historically, base salary has been the primary component of our compensation packages as it provides a constant and consistent source of income to
our named executive officers. The base salary established for each of our named executive officers is intended to reflect each individual's professional responsibilities, the skills and experience
required for the job, their individual performance, business performance and a competitive salary based on market comparables.
Typically,
base salaries are reviewed annually by our compensation committee with input from our Chief Executive Officer, for base salaries other than the Chief Executive Officer, and may be increased
depending on business circumstances and individual situations. In past years, our compensation
committee determined base salaries partially based on our named executive officers' experience in the industry with reference to the base salaries of similarly situated executives in other companies
of similar size and stage of development operating in the specialty retail apparel industry, such as rue21, Wet Seal, Charlotte Russe, Zumiez and CitiTrends. This determination is informal and based
primarily on the general knowledge of our Chief Executive Officer and compensation committee members of the practices within our industry. With this information, the compensation committee sets the
salary levels for each named executive officer and determines whether to award a salary increase.
In
fiscal year 2010, our named executive officers received the following in annual base salary: $400,000 for Mr. Weinstein (of which he received $382,692 based on his salary increase described
in the paragraph below); $350,000 for Ms. Angelo and $304,200 for Mr. Walters.
In
2010, Mr. Weinstein received a salary increase from $350,000 to $400,000 to align his base salary with that of similarly situated chief executive officers. There were no other salary
increases or decreases in 2010. Effective March 1, 2011, Mr. Walters' base salary will be increased to $350,000.
Our
compensation committee, with input from the Chief Executive Officer, will annually review base salaries and set salaries for the fiscal year that are competitive and aim to retain our executives.
The salaries may be set based on recommendations by compensation consultants, formal benchmarking against a particular set of comparable companies or survey data.
Bonus Awards
Our compensation committee, with input from our Chief Executive Officer other than for his own bonus, determines annual cash bonus awards to our
named executive officers. The annual cash bonuses are intended to reward the achievement of corporate objectives linked to our financial results. We believe that our bonus awards help us attract and
retain qualified and highly skilled executives and reward and motivate named executive officers who have had a positive impact on corporate results.
Historically,
on an annual basis, our compensation committee typically has set aside a bonus pool for executive officers and key employees with bonuses paid out, if at all, based on positive financial
performance and at the compensation committee's sole discretion. Each named executive officer is eligible to receive a bonus award from the bonus pool, based on his or her position with our company
and the compensation committee's determination of the officer's individual contribution to our financial performance. The bonus percentages were not established in advance, but were based on
achievement of strong financial performance and the individual's contribution to the achievement of corporate performance, with full discretion to award any bonus resting with the compensation
committee.
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For
fiscal year 2010, the compensation committee established a bonus plan for executive officers and key employees based on EBITDA targets. Each of our named executive officers is eligible to receive
a bonus award from the bonus pool based on (1) achievement of the EBITDA target, (2) his or her position with the company and (3) his or her relative contribution to the
achievement of the EBITDA target. The awards may be adjusted upward or downward based on the compensation committee's determination of an individual's contribution to the achievement of the EBITDA
targets. We expect the bonus plan to work on a sliding scale in which executives will be able to share in any financial upside and forgo full bonus awards in the case of financial downside. For
example, under this bonus plan:
•
if we achieve $18.5 million of EBITDA, the executive officers and key employees will share in the bonus pool;
•
if we achieve over $18.5 million of EBITDA, the bonus pool will increase proportionately with the increase in
EBITDA and similarly if we fail to achieve $18.5 million of EBITDA, our bonus pool will decrease proportionately; and
•
if we achieve $14.8 million of EBITDA or less, no bonus amounts will be awarded.
In
future years we expect our bonus awards to operate similarly to the 2010 bonus plan with net income rather than EBITDA as the metric by which our corporate performance is measured for bonus plan
purposes. We expect target bonuses, reflected as a percentage of base salary, to be set at the beginning of each fiscal year measured against pre-determined net income targets and that
bonuses will be awarded based on achievement of those targets while considering the individual's contribution to our performance.
We
granted Mr. Walters a one time discretionary bonus totaling $20,000 upon completion of our initial public offering to reward Mr. Walters for his work on that offering. In addition, we
awarded Mr. Weinstein, Mr. Walters and Ms. Angelo amounts under the terms of our success bonus plan upon
completion of our initial public offering. See " —Success Bonus Plan" for more information.
Equity-Based Compensation
Our compensation committee believes that equity-based compensation is an important component of our executive compensation approach and that
providing a significant portion of our named executive officers' total compensation package in equity-based compensation aligns the incentives of our named executive officers with the interests of our
stockholders and with our long-term corporate success. Additionally, our compensation committee believes that equity-based compensation awards enable us to attract, motivate, retain and
adequately compensate executive talent. To that end, we have awarded equity-based compensation in the form of options to purchase shares of our common stock. Our compensation committee believes stock
options provide our named executive officers with a significant long-term interest in our success by rewarding the creation of stockholder value over time.
Generally,
each named executive officer is provided with a stock option grant when he or she joins our company based upon his or her position with us and his or her relevant prior experience. Each of
our stock option grants generally vests over the course of four years with 25% of the shares vesting on the first anniversary of the grant date or employment date, as applicable, and the remainder of
the shares vesting in 12 equal quarterly installments. In addition to stock options granted upon commencement of employment with us, our compensation committee may grant additional stock options to
retain our executives and to recognize the achievement of corporate and individual goals.
Stock
options are granted with an exercise price equal to or greater than the fair value of our stock on the applicable date of grant. Prior to the completion of our initial public offering, our
compensation committee determined fair value for purposes of stock option pricing based on the compensation committee's own good-faith analysis after review of our performance at the time
the options were
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granted.
For future grants, as a public company, fair value will be based on the closing price of our common stock on The Nasdaq Global Market on the date of grant.
In
general, stock option grants to our named executive officers are determined at the discretion of our compensation committee. In addition, our compensation committee also considers a named executive
officer's current position with our company, the size of his or her total compensation package and the amount of existing vested and unvested stock options, if any, then held by the executive officer.
No formal benchmarking efforts are made by our compensation committee with respect to the size of
option grants made to executive officers and, in general, the determination process is informal. Historically, our compensation committee has made all stock option grant decisions with respect to our
named executive officers. The compensation committee intends to formalize this process with annual grants and may use formal bench-marking efforts to determine grant amounts.
No
equity awards were granted to our named executive officers in fiscal 2010.
Other Executive Benefits and Perquisites
We provide the following benefits to our named executive officers to attract and retain qualified and highly skilled
executives:
•
health insurance, including payment of 100% of the insurance premium;
•
four weeks paid vacation;
•
short-term disability as provided in certain named executive officer's employment agreements;
•
automobile allowance of $1,000 a month; and
•
term life insurance for Mr. Weinstein and Mr. Walters.
We
also provide for the reimbursement of travel expenses to our named executive officers. In May 2010, we provided $20,000 in living and travel expenses to Mr. Weinstein related to fiscal year
2009
and reimbursed Mr. Walters $20,000 for certain relocation expenses for his relocation to Jacksonville, Florida in fiscal year 2010.
Severance and Change-in-Control Benefits
We have entered into employment agreements with the named executive officers that contain severance benefits, the terms of which are described under
the heading "—Employment Agreements and Potential Payments Upon Termination or Change-in-Control." We believe these severance benefits are essential elements of our
executive compensation package by assisting in recruiting and retaining talented executives.
Section 162(m) Compliance
Section 162(m) of the Code limits us to a deduction for federal income tax purposes of no more than $1.0 million of compensation paid
to certain executive officers in a taxable year. Compensation above $1.0 million may be deducted if it is "performance-based compensation" within the meaning of the Code. Our board of directors
believes that we should be able to continue to manage our executive compensation for our named executive officers so as to preserve the related federal income tax deductions, although individual
exceptions may occur.
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Success Bonus Plan
We adopted a success bonus plan on April 10, 2007, which provided for the grant of up to an aggregate of $1.0 million in bonuses to
specified employees payable upon the closing of either an initial public offering or certain change of control events defined in the success bonus plan.
In
October 2010, as a result of the closing of our initial public offering, Mr. Weinstein, Mr. Walters and Ms. Angelo received awards totaling $15,000, $30,000 and $10,000,
respectively, under the terms of the success bonus plan.
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Summary Compensation Table
The following table sets forth certain information regarding compensation for fiscal years 2008, 2009 and 2010 awarded to or earned by our named
executive officers.
Name and Principal Position
Fiscal
Year
Salary ($)
Non-Equity
Incentive Plan
Compensation
Bonus
(4)
($)
Option Awards
($)
(5)
All Other
Compensation
($)
(6)
Total
($)
B. Allen Weinstein
(1)
2010
382,692
15,000
(2)
—
—
29,452
427,144
President & CEO
2009
134,615
107,500
(3)
—
496,342
31,073
769,530
2008
—
—
—
—
—
—
Richard L. Walters
2010
304,200
30,000
(2)
20,000
—
65,332
419,532
Executive VP & CFO
2009
304,200
50,000
(3)
—
—
40,072
394,272
2008
304,119
50,000
(3)
—
26,954
72,454
453,527
Beth R. Angelo
2010
350,000
10,000
(2)
—
—
32,921
392,921
Executive VP & CMO
2009
319,230
86,436
(3)
—
248,171
34,908
688,745
2008
300,000
75,000
(3)
—
26,954
30,349
432,303
(1)
Mr. Weinstein
joined us as our President and Chief Executive Officer on August 3, 2009.
(2)
Represents
amounts awarded under our Success Bonus Plan. The amounts earned for fiscal 2010 pursuant to our bonus plan are not determinable as
of the date hereof. We expect to determine the bonuses payable in March 2011 in connection with the audit of our fiscal 2010 financial statements.
(3)
Represents
amounts awarded under incentive bonus plans in effect in each fiscal year.
(4)
Represents
a discretionary bonus award made in connection with our initial public offering.
(5)
For
stock options granted, the value set forth is the full grant date fair value, in accordance with FASB ASC 718. Valuation assumptions used
to determine the fair value of the option awards are described in the notes to the financial statements appearing elsewhere in this prospectus.
(6)
Represents
amounts paid on behalf of each of the named executive officers for the following respective categories of compensation: 401(k)
matching contributions for eligible employees; term life insurance; car allowance; health premiums and medical reimbursements and other personal benefits. The amounts included in that column for each
of the named executive officers include the following:
Name
Fiscal
Year
401(k)
Match
($)
Health
Premiums
($)
Medical
Reimbursement
($)
(1)
Term
Life
Insurance
($)
Automobile
Allowance
($)
Other
($)
Total($)
B. Allen Weinstein
2010
—
15,795
1,640
17
12,000
—
29,452
2009
—
6,066
—
7
5,000
20,000
(2)
31,073
2008
—
—
—
—
—
—
—
Richard L. Walters
2010
6,096
15,795
10,494
947
12,000
20,000
(3)
65,332
2009
6,095
14,192
6,838
947
12,000
—
40,072
2008
4,715
12,922
7,507
947
12,000
34,363
(4)
72,454
Beth R. Angelo
2010
3,346
15,795
1,763
17
12,000
—
32,921
2009
3,345
14,192
5,354
17
12,000
—
34,908
2008
4,715
12,922
695
17
12,000
—
30,349
(1)
The
named executive officers receive reimbursements of up to $10,000 for medical expenses not covered by our benefits plans. This benefit
terminated with the completion of our initial public offering.
(2)
Represents
temporary living expenses.
(3)
Represents
reimbursement for certain relocation expenses for Mr. Walters' relocation to Jacksonville, Florida.
(4)
Includes
commuting cost and temporary living expenses.
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2010 Grants of Plan-Based Awards
None of our named executive officers received equity awards in fiscal year 2010.
Outstanding Equity Awards at Fiscal Year End 2010
The following table sets forth certain information with respect to outstanding equity awards of each of our named executive officers as of fiscal
year end 2010 (January 1, 2011):
Option Awards
Name
Grant
Date
Number of Securities Underlying
Unexercised Options
(#) Exercisable
(1)
Number of Securities
Underlying Unexercised Options
(#) Unexercisable
(1)
Option
Exercise
Price
(1)
Option
Expiration Date
B. Allen Weinstein
7/7/09
122,259
268,969
$
3.94
10/12/19
Richard L. Walters
8/15/07
134,135
—
$
3.94
8/15/17
2/7/08
24,452
11,114
$
0.98
2/7/18
Beth R. Angelo
2/7/08
24,452
11,114
$
0.98
2/7/18
10/12/09
61,129
134,485
$
3.94
10/12/19
(1)
The
options have a term of 10 years and generally vest in accordance with the following schedule: 25% of the total number of shares vest on
the first anniversary of either the grant date or employment date, as applicable, and the remaining shares vest in 12 equal quarterly installments.
Options Exercised and Stock Vested
None of our named executive officers exercised stock options in fiscal year 2010.
Pension Benefits
We do not sponsor defined benefit plans. Consequently, our named executive officers did not participate in, or have account balances in, qualified or
nonqualified defined benefit plans. Our board of directors or compensation committee may elect to adopt qualified or nonqualified defined benefit plans in the future if it determines that doing so is
in our best interest.
Nonqualified Deferred Compensation
We do not maintain nonqualified defined contribution plans or other deferred compensation plans. Consequently, our named executive officers did not
participate in, or have account balances in, nonqualified defined contribution plans or other nonqualified deferred compensation plans. Our board of directors or compensation committee may elect to
provide our executive officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our
best interest.
Employment Agreements and Potential Payments Upon Termination or Change-in-Control
Employment Agreements
We have entered into employment agreements with each of our named executive officers as described below.
Allen Weinstein —
On July 8, 2009, we entered into an employment agreement with Mr. Weinstein which provides for an
annual base salary of $350,000 (which was later increased to $400,000), subject to increase by our board of directors, a discretionary bonus, the grant of stock options and four weeks of paid
vacation. In addition, it provides a $1,000 monthly car allowance, use of a cell phone, health care coverage, reimbursement of reasonable travel, entertainment and other business expenses and
premium payments on a $50,000 life insurance policy.
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Beth Angelo —
On October 14, 2010, we entered into an employment agreement with Ms. Angelo
which provides for a base salary of $350,000 annually, subject to adjustment by our board of directors, a discretionary bonus, and four weeks of paid vacation. In addition, it provides a
$1,000 monthly car allowance, health care coverage and reimbursement of reasonable travel, entertainment and other business expenses.
Richard Walters —
On November 27, 2007, we entered into an employment agreement with Mr. Walters which provides for an
annual base salary of $304,200, (which was subsequently increased by an amendment to the employment agreement to $350,000 effective March 1, 2011) subject to adjustment by our board of
directors, a discretionary bonus and four weeks of paid vacation. In addition, it provides a $1,000 monthly car allowance and reimbursement of reasonable travel, entertainment and other
business expenses. The agreement also provides for annual premium payments of up to $930 on an existing term life insurance policy and health care coverage. On January 24, 2011, in connection
with the amendment to Mr. Walters' employment agreement, he was granted stock options to purchase 18,500 shares of our common stock, which vest 25% on January 24, 2012, with the balance
vesting in equal amounts over the following 12 consecutive quarters.
Termination of Employment Agreements and Change-in-Control Arrangements
The information below describes and quantifies certain compensation that would become payable under each named executive officer's employment
agreement if, as of January 1, 2011, their employment agreements were in effect and their employment with us had been terminated. Due to the number of factors that affect the nature and amount
of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any
such event.
The
employment agreements for our named executive officers provide for compensation in the event of termination of their employment due to death or disability, without cause, and by the executive for
good reason. In general, these employment agreements contain the following termination-related provisions:
•
Termination Due to Death or Disability.
Severance payments
equal to any unpaid portion of the executive's base salary, any unpaid bonus from prior years, and any other unpaid amounts and benefits to which the executive is entitled as of the termination of the
executive's employment under any of our compensation plans and programs, the aggregate reduced by any insurance or disability benefits paid to the executive under our benefit plans.
•
Termination Without Cause or for Good Reason.
Severance
payments equal to the executive's base salary for the period described below, any unpaid bonus from prior years, and any other unpaid amounts and benefits to which the executive is entitled as of the
termination of employment under any of our compensation plans and programs.
•
Severance.
Receipt of any severance and benefits upon
termination without cause or for good reason is conditioned on the executive signing a release and waiver of claims in a form satisfactory to us.
•
Non-competition.
Our executive officers are also generally
prohibited from disclosing confidential information and trade secrets, soliciting any employee, vendor or customer for two years following termination of their employment and working with or
for any competing companies during their employment and for one year thereafter.
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•
"For Cause."
Under the employment agreements, "cause"
generally means (i) a material failure of the executive in performing his or her duties, (ii) willful misconduct, (iii) an act of moral turpitude, (iv) conviction of, or
guilty plea or nolo contendere to, a felony or crime involving fraud, dishonesty or moral turpitude, (v) material breach of his or her employment agreement or a material policy or
(vi) any breach of fiduciary duties of loyalty and trust.
•
"Good Reason."
Under the employment agreements, "good
reason" generally means (i) a reduction in the executive's responsibilities without his or her consent, (ii) attempted or actual relocation of the executive's principal workplace beyond
a 50 mile radius of our location or (iii) our failure to provide the executive's compensation, benefits and perquisites under his or her employment agreement.
Allen Weinstein —
If Mr. Weinstein terminates his employment for good reason, he must provide us with 90 days' prior
written notice. Mr. Weinstein would receive 12 months of his annual base salary if his employment is terminated without cause or for good reason.
Beth Angelo —
Differing from the general provisions described above, if Ms. Angelo terminates her employment for good reason,
she must provide us with 60 days' prior written notice. Ms. Angelo would receive 12 months of her annual base salary if her employment is terminated without cause or for good reason.
Richard Walters —
Differing from the general provisions described above, and in addition to 12 months of his annual base
salary if Mr. Walters is terminated without cause or for good reason, Mr. Walters would receive severance payments for 12 months if he terminates his employment with us for any reason
after his family has relocated to Florida by providing six months' prior written notice
and complying with confidentiality, non-solicitation and non-compete requirements of his agreement for one year following such termination.
Under
our Plan, in the event of a merger, consolidation, sale of all or substantially all of our assets, sale or exchange of all our common stock for cash, securities or other property or our
liquidation or dissolution, the compensation committee shall have the discretion to provide for any or all of the following: (a) the assumption of outstanding options or the substituting of equivalent
rights by the acquiring or succeeding entity; (b) the termination of all unexercised options immediately prior to the transaction unless exercised within a specified period; (c) the
exercise of outstanding options (in whole or in part) prior to or upon the transaction; (d) cash payments to be made to holders equal to the excess, if any, of the acquisition price over the
exercise price (net of tax withholdings); (e) the conversion of options into the right to receive liquidation proceeds in connection with our liquidation or dissolution; or (f) any
combination of the foregoing.
Under
the individual stock option agreements entered into with each of our named executive officers, under the Plan prior to its amendment and restatement, any unvested stock options represented by
the agreements will fully vest immediately prior to the closing of a merger, consolidation or sale of all or substantially all of our assets, in which our stockholders, together with any affiliates,
do not own or hold, immediately after the merger, consolidation or sale, at least 25% of the total voting power of the outstanding capital stock of the acquiring party. In the event of a termination
of employment (other than for death or disability), the option remains exercisable to the extent vested for a period of 90 days from the date of termination. In the event a named executive
officer's employment is terminated due to death or disability, the option remains exercisable to the extent vested for a period of 365 days from the date of termination.
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The
following table sets forth the amounts of compensation payable by us to our named executive officers, including cash severance, benefits and perquisites and long-term incentives. The
amounts shown assume that the specified event was effective as of January 1, 2011 under their employment agreements. The actual amounts to be paid can only be determined at the time of the
termination of employment or change-in-control, as applicable.
Benefits and
Payments
Termination by
Company
Without Cause
($)
Employee
Resignation for
Good Reason
($)
Termination Due
to Death
or Disability
($)
Change-in-
Control
($)
B. Allen Weinstein
Base Salary
400,000
400,000
—
(1)
—
Bonus
—
(2)
—
(2)
—
(2)
—
Stock Options
—
(3)
—
(3)
—
(4)
4,166,578
(5)
Richard L. Walters
Base Salary
304,200
304,200
—
—
Bonus
—
(2)
—
(2)
—
(2)
—
Stock Options
—
(3)
—
(3)
—
(4)
1,912,591
(5)
Beth R. Angelo
Base Salary
350,000
350,000
—
Bonus
—
(2)
—
(2)
—
(2)
—
Stock Options
—
(3)
—
(3)
—
(4)
2,556,692
(5)
(1)
In
the event of termination due to death or disability, the named executive officers would receive any accrued and unpaid base salary.
(2)
In
the event of termination, the named executive officers would receive any accrued and unpaid bonus amounts. The amounts earned for fiscal
2010 pursuant to our bonus plan are not determinable as of the date hereof. We expect to determine the bonuses payable in March 2011 in connection with the audit of our fiscal 2010 financial
statements.
(3)
In
the event the named executive officer's employment is terminated, except due to death or disability, only vested options remain exercisable
for a period of 90 days from the date of termination.
(4)
In
the event the named executive officers are terminated due to death or disability, only vested options remain exercisable for a period of
365 days from the date of termination.
(5)
Represents
the difference between the closing price of our common stock on January 3, 2011 ($14.59), the first trading day following
January 1, 2011, and the exercise price of the options held by each named executive officer.
Amended and Restated 2006 Equity Incentive Plan
Our board of directors adopted our 2006 Equity Incentive Plan, effective September 29, 2006, which was amended in July 2007 to modify the
definition of change in control and amended and restated upon completion of our initial public offering.
As
of January 21, 2011, no shares of common stock had been issued upon the exercise of options granted under the Plan and options to purchase 495,146 shares were vested and unexercised under the Plan.
The
following is a summary of the material terms of the Plan, which became effective upon completion of our initial public offering. The summary does not include all of the provisions of the Plan. For
further information about the Plan before its amendment and restatement, we refer you to the complete copy of the 2006 Equity Incentive Plan, which we included as an Exhibit to our registration
statement for our initial public offering. For further information about the Plan, we refer you to the complete copy of the Plan, which we included as an Exhibit to our registration statement of which
this prospectus is a part.
The
Plan provides for the grant of incentive stock option and nonstatutory stock options, which we collectively refer to as "awards" or "options" in connection with the Plan. Non-employee directors
and
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officers
and other employees of us and our affiliates, as well as others performing consulting services for us, are eligible for grants under the Plan. The purpose of the Plan is to encourage
ownership of our common stock by our employees, consultants and directors and to provide additional incentives for them to promote the success of our business.
Administration
The compensation committee of the board of directors administers the Plan, although the board itself also may exercise any of the powers and
responsibilities under the Plan. Subject to the terms of the Plan, the compensation committee will select the recipients of options and determine, among other things, the:
•
number of shares of common stock covered by the options and the dates upon which such options become exercisable;
•
type of option and the exercise price and method of payment for each such option;
•
vesting period for options and any potential acceleration of vesting; and
•
duration of options.
Available Shares
The aggregate number of shares of our common stock which may be issued or subject to outstanding awards under the Plan may not exceed
1,646,209 shares, which may be either authorized and unissued shares of our common stock or shares of common stock held in our treasury. In general, if awards under the Plan are for any reason
cancelled, or expire or terminate, without having been exercised in full, the number of shares covered by such awards that were not purchased will again be available for the grant of awards under the
Plan.
Eligibility for Participation
Non-employee members of our board of directors, as well as employees of, and consultants to, us or any of our subsidiaries and affiliates are
eligible to receive awards under the Plan. The selection of participants is within the sole discretion of the compensation committee.
Incentive Stock Options
Incentive stock options are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended,
and will be granted pursuant to incentive stock option agreements. The compensation committee will determine the exercise price for an incentive stock option, which may not be less than 100% of the
fair market value of the stock underlying the option determined on the date of grant. In addition, incentive options granted to employees who own, or are deemed to own, more than 10% of the combined
voting power of our stock, must have an exercise price not less than 110% of the fair market value of the stock underlying the option determined on the date of grant.
Nonstatutory Stock Options
Nonstatutory stock options are not intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as
amended, and will be granted pursuant to nonstatutory stock option agreements. The compensation committee will determine the exercise price for a nonstatutory
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stock
option, which may not be less than the fair market value of the stock underlying the option determined on the date of grant.
Transferability
Awards granted under the Plan are generally nontransferable (other than by will or the laws of descent and distribution), except that the
compensation committee may provide for the transferability of nonstatutory stock options at the time of grant or thereafter to certain family members.
Changes to Capital Structure
In the event of certain types of changes in our capital structure, such as a share split, the number of shares reserved under the plan and the number
of shares and exercise price of all outstanding awards will be appropriately adjusted.
Change of Control
In the event of a merger, consolidation, sale of all or substantially all of our assets, sale or exchange of all our common stock for cash,
securities or other property or our liquidation or dissolution, the compensation committee shall have the discretion to provide for any or all of the following: (a) the assumption of
outstanding options or the substituting of equivalent rights by the acquiring or succeeding entity; (b) the termination of all unexercised options immediately prior to the transaction unless
exercised within a specified period; (c) the exercise of outstanding options (in whole or in part) prior to or upon the transaction; (d) cash payments to be made to holders equal to the
excess, if any, of the acquisition price over the exercise price (net of tax withholdings); (e) the conversion of options into the right to receive liquidation proceeds in connection with our
liquidation or dissolution; or (f) any combination of the foregoing.
Amendment and Termination
Subject to the limitations specified in the Plan, our board of directors may at any time amend any or all of the provisions of the Plan, or terminate
it entirely. Except as otherwise provided in the Plan, the rights of a participant under awards outstanding at the time of any amendment or modification may not be impaired without the consent of the
participant.
Limitation of Liability and Indemnification of Officers and Directors
As permitted by Delaware law, our certificate of incorporation and by-laws will provide that we will indemnify our directors and officers to the
fullest extent permitted by Delaware law. We have in place directors' and officers' liability insurance that insures our directors and officers against the costs of defense, settlement or payment of a
judgment under certain circumstances. See "Certain Relationships and Related Party Transactions—Indemnification of Officers and Directors."
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
We describe below transactions during our last three fiscal years to which we were a party or will be a party, in which:
•
the amounts involved exceeded or will exceed $120,000; and
•
any of our directors, executive officers, holders of more than 5% of our common stock or any member of their immediate
family had or will have a direct or indirect material interest.
Stockholders' Agreement
On October 1, 2006, we entered into a stockholders' agreement with WestView Capital Partners, L.P., entities advised by PineBridge
Investments (formerly AIG Investments), George Kolber, The Doolan Family First Limited Partnership, of which Martin Doolan, our director, is managing general partner, Jerrold Rosenbaum, Beth
Angelo, Laurie Bauguss, Curtis Hill, GVK, LP, an entity affiliated with a former officer, and Terbell Partners, Ltd. The agreement provided, among other things, that three members of our
board of directors will be designated by WestView, one member by PineBridge, and two members by the holders of a majority of the shares of Series B preferred stock. Additionally, WestView and
PineBridge could nominate two members and one member, respectively, to our three-member compensation committee. This agreement terminated by its terms upon completion of our initial public offering.
Registration Rights Agreement
On October 1, 2006, we entered into a registration rights agreement with WestView, entities advised by PineBridge, George Kolber, The Doolan
Family First Limited Partnership, Jerrold Rosenbaum, Beth Angelo, Laurie Bauguss, Curtis Hill, GVK, LP and Terbell Partners, Ltd. The agreement provides specified stockholders with
certain demand and "piggyback" registration rights and other registration rights, subject to lock-up arrangements.
Demand and Piggyback Registration Rights
Pursuant to our registration rights agreement, specified holders of our common stock issued upon conversion of our Series A preferred stock
have the right at any time, but on not more than three occasions, to require us to register any or all of their shares under the Securities Act at our expense. Following a demand, all other holders of
registrable securities may request the inclusion of any or all of their shares in the registration statement. Our obligations pursuant to this demand registration right is limited to offerings in
which at least 80% of the securities to be registered are anticipated to be sold to the public. Under some circumstances, we may delay filing a registration statement for up to 180 days in a
12-month period. Additionally, all holders of registrable securities are entitled to request the inclusion of any of their shares in any registration statement, with some exceptions, at
our expense whenever we propose to register any of our securities under the Securities Act. All demand and piggyback registration rights are subject to limitations that may be imposed by the managing
underwriter on the number of shares to be included in the underwritten offering.
Short-Form Registration Rights
Pursuant to our registration rights agreement, specified holders of our registrable securities are also entitled to additional short-form
registration rights. Commencing on the date that we become eligible to register securities on Form S-3, each holder of at least 5% of our registrable securities who is a party to
the registration rights agreement may request registration of their shares if the anticipated
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aggregate
offering amount of the shares exceeds $1.0 million. There is no limit to the number of requests for registrations on Form S-3.
Indemnification
In connection with all registrations pursuant to the registration rights agreement, we have agreed to indemnify all holders of registrable securities
against specified liabilities, including liabilities under the Securities Act. All stockholders requesting or joining in a registration may be required to agree to indemnify us against certain
liabilities, but in no event will any single stockholder's liabilities exceed the net proceeds to that stockholder from the sale of the registrable securities.
Termination
The registration rights agreement will terminate upon the earlier of our voluntary liquidation or the sale of all or substantially all of our assets
or outstanding common stock.
Letters of Credit
On January 25, 2008, WestView, of which Carlo von Schroeter, our director, is managing partner, and John H. Turner, our director, is
general partner, AIG Global Asset Management Holdings Corp., a predecessor entity to PineBridge Global Investments LLC, of which Scott Gallin, our director, is managing director, Beth Angelo,
our Chief Merchandising Officer, Executive Vice President, President of Direct Sales and a director, Jerrold Rosenbaum, a director and a founder, Laurie Bauguss, a consultant and the daughter of
Mr. Rosenbaum, and Curtis Hill, our former President and Chief Executive Officer, issued letters of credit in the following approximate amounts to the administrative agent of our senior credit
facility to secure the guaranty of any borrowings under our revolving credit facility, certain interest on our term loan A facility and term loan B facility and certain other fees:
$2.0 million, $2.0 million, $380,000, $1.040 million, $380,000 and $200,000, respectively. In exchange for the letters of credit, we approved the conditional authorization and
issuance of up to 61,000 shares of Series D preferred stock in the event that a draw is made on these letters of credit. The guarantees and the letters of credit have been terminated.
Demand Promissory Notes
On January 23, 2008, our board of directors authorized us to borrow an aggregate of $1.0 million at an interest rate of LIBOR plus a
margin of 1.5% per annum from WestView, of which Carlo von Schroeter, our director, is managing partner, and John H. Turner, our director, is general partner, AIG Global Asset Management
Holdings Corp., a predecessor entity to PineBridge Global Investments LLC, of which Scott Gallin, our director, is managing director, and Katmandu Investment Company, LLC, of which
Jerrold Rosenbaum, our director and a founder, is the president, with each entity funding approximately $333,333. We repaid aggregate interest of 4.81% on the notes and the principal amount in full on
January 28, 2008 with borrowings under our senior credit facility.
Arrangements with Jerrold Rosenbaum
Lease Agreement
We lease our executive office, warehouse and distribution center from Powers Avenue Joint Venture, a Florida partnership, of which Jerrold Rosenbaum,
one of our directors and a founder, owns approximately 87.3%, Beth Angelo owns 4.7%, Laurie Bauguss owns 4.7% and Curtis Hill, our former President and Chief Executive Officer, owns 3.3%. The lease
commenced on October 1, 2006 at an initial rental rate of $408,000 per year. The initial term of the lease expires on October 1, 2016. We have the option to extend the term of the lease
for two consecutive periods of two years each. The rental rates for fiscal years 2007, 2008 and 2009 per month were $37,144, $37,144 and $38,964,
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respectively.
As of January 2, 2010, we have an estimated $5.7 million commitment related to this lease, including the optional extension periods.
Employment Agreement and Part-Time Arrangement
On October 1, 2006, Mr. Rosenbaum entered into an employment agreement with us to serve as Vice Chairman of our board of directors at a
base salary of $860,000 a year. His employment agreement terminated effective April 9, 2007 and as a result he received his full base salary for the remainder of the first year of his agreement
and $500,000 per year thereafter, plus benefits. He also received certain additional benefits aggregating approximately $34,885, $17,376 and $15,880 for fiscal year 2007, fiscal year 2008 and fiscal
year 2009, respectively. In January 2008, this was reduced to $250,000 per year, which payments stopped in October 2009. From October 2009 through the completion of our initial public offering,
Mr. Rosenbaum received $50,000 per year for his part-time work assessing and reviewing potential store locations in addition to $1,000 per day for each real-estate site visit.
After
the completion of our initial public offering, we began paying Mr. Rosenbaum $25,000 a year for his part-time services. We also agreed to pay Mr. Rosenbaum a fee of
$1,000 per day for his visits to potential store locations where he reviews and assesses the suitability of the location.
Arrangements with Britt Bauguss and Laurie Bauguss
Laurie Bauguss, a consultant, is the daughter of Jerrold Rosenbaum, a director, and the sister of Beth Angelo, our Chief Merchandising Officer,
Executive Vice President, President of Direct Sales and director. On October 1, 2006, Ms. Bauguss entered into an employment agreement, which terminated on November 2007 under
which she earned approximately $211,250 for 2007, plus certain additional benefits aggregating $23,058. She worked as a non-contracted employee for fiscal year 2008 and earned $219,500, plus certain
additional benefits aggregating approximately $12,922. In fiscal year 2009, she worked part of the year as a non-contracted employee and later as a consultant and earned $87,260 in the aggregate, plus
certain additional benefits aggregating approximately $1,122.
Britt
Bauguss, Director of Construction, is the son-in-law of Jerrold Rosenbaum, a director, and the brother-in-law of Beth Angelo, our Chief
Merchandising Officer, Executive Vice President, President of Direct Sales and director. On October 1, 2006, Britt Bauguss entered into an employment agreement, which agreement was amended on
May 5, 2008 to extend the term until the date Mr. Bauguss' separation of employment with us for any reason (thereby making him an employee at will) and to provide for a base salary of
$104,000. Under the agreement, Mr. Bauguss earned approximately $265,380 for 2007, $167,519 for 2008 and $144,308 for 2009, plus certain additional benefits aggregating approximately $24,528,
$25,746 and $25,537 for fiscal year 2007, fiscal year 2008 and fiscal year 2009, respectively. Mr. Bauguss received a payment upon completion of our initial public offering under our success
bonus plan and we awarded him an option grant in the amount of 7,500 shares at an exercise price equal to the initial public offering price. This award vests over four years and the term of the
option is 10 years.
Indemnification of Officers and Directors
Our certificate of incorporation and by-laws provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware
law. We have purchased directors' and officers' liability insurance that insures against the costs of defense, settlement or payment of a judgment under certain circumstances. In addition, our
certificate of incorporation provides that our directors will not be liable for monetary damages for breach of fiduciary duty.
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We
also entered into indemnification agreements with each of our executive officers and directors. The indemnification agreements provide the executive officers and directors with contractual rights
to indemnification, expense advancement and reimbursement, to the fullest extent permitted under Delaware law. Additionally, we may enter into indemnification agreements with any new directors or
certain of our executive officers that may be broader in scope than the specific indemnification provisions contained in Delaware law.
There
is no pending litigation or proceeding naming any of our directors or officers to which indemnification is being sought, and we are not aware of any pending or threatened litigation that may
result in claims for indemnification by any director or officer.
Policies and Procedures for Related Person Transactions
Our board of directors has adopted a written policy for the review of any transaction, arrangement or relationship in which we are a participant, the
amount involved exceeds $100,000 and one of our executive officers, directors, director nominees or 5% stockholders (or their immediate family members), each of whom we refer to as a "related person,"
has a direct or indirect material interest.
If
a related person proposes to enter into such a transaction, arrangement or relationship, which we refer to as a "related person transaction," the related person must report the proposed related
person transaction to the chairperson of our nominating and corporate governance committee. Additionally, in the case of 5% stockholders, we will solicit this information via an annual questionnaire.
The policy calls for the proposed related person transaction to be reviewed and, if deemed appropriate, approved by the nominating and corporate governance committee. Whenever practicable, the
reporting, review and approval will occur prior to entering into the transaction. If advance review and approval is not practicable, the nominating and corporate governance committee will review and,
in its discretion, may ratify the related person transaction. Any related person transactions that are ongoing in nature will be reviewed annually and the nominating and corporate governance committee
may establish guidelines for our management to follow its ongoing dealings with the related person.
A
related person transaction reviewed under the policy will be considered approved or ratified if it is authorized by the nominating and corporate governance committee after full disclosure of the
related person's interest in the transaction. The written policy also provides for the standing pre-approval of certain related person transactions, such as the employment compensation of
executive officers, director compensation and certain charitable contributions, among other things.
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PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information as of January 21, 2011, regarding the beneficial ownership of our common stock
by:
•
each person who we know to beneficially own more than 5% of our common stock;
•
each of our directors;
•
each of our named executive officers;
•
all of our directors and executive officers as a group; and
•
each of the selling stockholders.
We
have determined beneficial ownership in the table in accordance with SEC rules. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have
deemed shares of our common stock subject to options held by that person that are currently exercisable or will become exercisable within 60 days of January 21, 2011 to be outstanding,
but we have not deemed these shares to be outstanding for computing the percentage ownership of any other person. The percentage of ownership indicated is based on 15,405,677 shares of common
stock outstanding as of January 21, 2011. To our knowledge, except as set forth in the footnotes below, each stockholder identified in the table possesses sole voting and investment power with
respect to all shares of our common stock shown as beneficially owned by that stockholder. Unless otherwise indicated, the address for each beneficial owner is c/o Body Central Corp.,
6225 Powers Avenue, Jacksonville, FL 32217.
Shares Beneficially
Owned Prior
to this Offering
Shares to be
Sold in this
Offering
Assuming No
Exercise of
Over-allotment
Option
Shares to be
Sold in this
Offering
Assuming Full
Exercise of
Over-allotment
Option
Shares Beneficially
Owned After
this Offering
Assuming No
Exercise of
Over-allotment
Option
Shares Beneficially
Owned After
this Offering
Assuming Full
Exercise of
Over-allotment
Option
Name and Address of Beneficial Owner
Number
Percent
Number
Number
Number
Percent
Number
Percent
5% Stockholders:
WestView Capital Partners, L.P.
3,047,842
(1)
19.8
%
1,515,682
1,721,407
1,532,160
9.9
%
1,326,435
8.6
%
Entities advised by PineBridge Investments
2,881,630
(2)
18.7
%
1,433,026
1,627,531
1,448,604
9.4
%
1,254,099
8.1
%
Executive Officers and Directors:
Beth R. Angelo
711,487
(3)
4.6
%
327,194
391,585
384,293
2.5
%
319,902
2.1
%
Martin P. Doolan
40,637
(4)
*
20,208
22,951
20,429
*
17,686
*
Scott M. Gallin
2,881,630
(2)
18.7
%
1,433,026
1,627,531
1,448,604
9.4
%
1,254,099
8.1
%
John K. Haley
—
*
—
—
—
*
—
*
Jerrold S. Rosenbaum
1,673,489
10.9
%
832,222
945,181
841,267
5.5
%
728,308
4.7
%
Carlo A. von Schroeter
3,047,842
(1)
19.8
%
1,515,682
1,721,407
1,532,160
9.9
%
1,326,435
8.6
%
John H. Turner
3,047,842
(1)
19.8
%
1,515,682
1,721,407
1,532,160
9.9
%
1,326,435
8.6
%
Richard L. Walters
160,810
(3)
1.0
%
18,820
37,640
141,990
*
123,170
*
B. Allen Weinstein
146,711
(3)
*
39,123
78,245
107,588
*
68,466
*
All executive officers and directors as a group (9 persons)
8,662,606
56.2
%
4,186,275
4,824,540
4,476,331
29.0
%
3,838,066
24.9
%
Other Selling Stockholders:
Laurie I. Bauguss
611,457
4.0
%
304,076
345,349
307,381
2.0
%
266,108
1.7
%
Julia B. Davis
33,533
(3)
*
3,353
6,706
30,180
*
26,827
*
Donna George
28,580
(3)
*
3,811
7,621
24,769
*
20,959
*
Ursula Gregoris
28,580
(3)
*
3,811
7,621
24,769
*
20,959
*
Curtis V. Hill
321,831
(5)
2.1
%
160,045
181,768
161,786
1.1
%
140,063
*
John Hill
26,675
(3)
*
3,557
7,113
23,118
*
19,562
*
George Kolber
406,377
(6)
2.6
%
202,090
229,519
204,287
1.3
%
176,858
1.1
%
Harriette Terbell
60,957
(7)
*
30,315
34,429
30,642
*
26,528
*
Lina Vainosky
20,005
(3)
*
2,667
5,334
17,338
*
14,671
*
*
Represents
beneficial ownership of less than one percent (1%) of our outstanding common stock.
(1)
Carlo
von Schroeter, our director, is a managing partner and John Turner, our director, is a general partner of WestView and may be deemed to
beneficially own the shares of common stock held by it. Both Messrs. von Schroeter and Turner disclaim
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such beneficial ownership. The address for Messrs. von Schroeter and Turner and WestView is 125 High Street, 26th floor, Boston MA 02110.
(2)
Consists
of 2,881,630 shares of our common stock held as follows:
•
48,027 by PineBridge PEP III Direct, L.P.;
•
384,218 by PineBridge PEP IV Co-Investment, L.P.;
•
1,949,903 by PineBridge Vantage Partners, L.P.;
•
115,265 by American International Group, Inc. Retirement Plan; and
•
384,217 by APEN Bermuda Ltd.
PineBridge
PEP III Direct, L.P., PineBridge PEP IV Co-Investment, L.P., PineBridge Vantage Partners, L.P.,
American International Group, Inc. Retirement Plan and APEN Bermuda Ltd. are advised by PineBridge Investments. PineBridge Investments has sole voting power and sole investment power
over the shares and is the beneficial owner of shares held by these entities, with the exception of APEN Bermuda Ltd. for which it disclaims beneficial ownership. Scott Gallin, our director, is
a managing director of PineBridge Investments and may be deemed to beneficially own the shares of common stock held by these entities. Mr. Gallin disclaims such beneficial ownership. The
address for Mr. Gallin and PineBridge Investments is 399 Park Avenue, 4
th
Floor, New York, NY 10022.
(3)
Includes
the following number of shares of common stock which a director, executive officer or selling stockholder has the right to acquire
upon the exercise of stock options that were exercisable as of January 21, 2011, or that will become exercisable within 60 days after that date:
Name
Number of Shares
B. Allen Weinstein
146,711
Richard L. Walters
160,810
Beth R. Angelo
100,030
Julia B. Davis
33,533
Donna George
28,580
Ursula Gregoris
28,580
John Hill
26,675
Lina Vainosky
20,005
For
purposes of computing the percentage of outstanding shares of common stock held by each person named above, we have given effect to their
options, each as noted above, and as if they were fully exercised.
(4)
Consists
of common stock held by the Doolan Family First Limited Partnership. Martin Doolan, our director, is managing general partner of the
Doolan Family First Limited Partnership and is deemed to beneficially own the shares of common stock held by it. Mr. Doolan disclaims such beneficial ownership.
(5)
Consists
of 321,831 shares beneficially owned by Curtis Hill, our former Chief Executive Officer and President, held as
follows:
•
60,956 shares of our common stock held by Curtis and Susan Hill, as trustees for Jennifer Lada, their daughter, which
beneficial ownership Mr. Hill disclaims;
•
60,956 shares of our common stock held by Curtis and Susan Hill, as trustees for Curtis Hill, Jr., their son, which
beneficial ownership Mr. Hill disclaims; and
•
199,919 shares of our common stock held directly by Curtis Hill.
(6)
Consists
of 406,377 shares beneficially owned by George Kolber held as follows:
•
76,166 shares of our common stock held by GVK, L.P., an entity controlled by Mr. Kolber. Mr. Kolber
has sole voting power and sole investment power over the shares held by this entity;
•
76,167 shares of our common stock held by George Kolber; and
•
254,044 shares of our common stock held by RKLH, L.P., an entity controlled by Mr. Kolber. Mr. Kolber
has sole voting power and sole investment power over the shares held by this entity.
The address for Mr. Kolber, GVK, L.P. and RKLH, L.P. is 884 Navesink River Road, Locust, NJ 07760.
(7)
The
address for Ms. Terbell is 401 Green Farms Road, Westport, CT 06880.
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DESCRIPTION OF CAPITAL STOCK
Introductory Note
The following description of our capital stock and provisions of our certificate of incorporation and by-laws are summaries only, and they are
qualified by reference to the certificate of incorporation and the by-laws which we included as Exhibits to our registration statement of which this prospectus is a part.
Authorized Capitalization
Our authorized capital stock consists of 150,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of undesignated
preferred stock, par value $0.001 per share. As of January 21, 2011, 15,405,677 shares of common stock were outstanding and no shares of preferred stock were outstanding.
Common Stock
Voting Rights
Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of stockholders. An election of directors
by our stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election. There are no cumulative voting rights for the election of directors,
which means that the holders of a majority of the shares of our common stock voted will be entitled to elect all of our directors.
Dividends
Holders of our common stock are entitled to receive proportionately any dividends as may be declared by our board of directors, and subject to any
preferential dividend rights of any then outstanding shares of preferred stock.
Liquidation
In the event of our liquidation, dissolution or winding up, holders of our common stock would be entitled to receive proportionately all assets
available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding
shares of preferred stock.
Rights and Preferences
Holders of our common stock have no preemptive, subscription, conversion or other rights, and there are no redemption or sinking fund provisions
applicable to our common stock. The rights, preferences and privileges of holders of our common stock are subject to and may be adversely affected by the rights of the holders of shares of any series
of our preferred stock that we may designate and issue in the future.
Preferred Stock
Under the terms of our certificate of incorporation, our board of directors has the authority, without further action by our stockholders, to issue
up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including voting rights, dividend rights, conversion rights,
redemption privileges and liquidation preferences.
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The
purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The
issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could make it more difficult for a third party to
acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. We
currently have no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.
Registration Rights
Pursuant to the registration rights agreement entered into with a certain number of our existing stockholders at the time of the 2006 Transaction,
certain holders of our common stock issued upon conversion of our Series A preferred stock have the right to require us to register any or all of their shares under the Securities Act at our
expense, subject to certain limitations. See "Certain Relationships and Related Party Transactions—Registration Rights Agreement" for more information.
Anti-Takeover Provisions
Certificate of Incorporation and By-laws
Classified Board
Our certificate of incorporation provides for our board of directors to be divided into three classes, with staggered three-year terms.
Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because
our stockholders do not have cumulative voting rights, our stockholders holding a majority of the shares of common stock outstanding will be able to elect all of our directors.
Stockholder Action by Written Consent
Pursuant to Section 228 of the Delaware General Corporation Law, any action required to be taken at any annual or special meeting of the
stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and
voted, unless the company's certificate of incorporation provides otherwise. Our certificate of incorporation and by-laws provide that all stockholder action must be effected at a duly called meeting
of stockholders and not by written consent, and that only our board of directors, chairman of our board of directors, chief executive officer or president (in the absence of a chief executive officer)
may call a special meeting of stockholders.
Advance Notice
In addition, our by-laws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders,
including proposed nominations of candidates for election to our board of directors. Stockholders at an annual meeting will only be able to consider proposals or nominations specified in the notice of
meeting or brought before the meeting by or at the direction of our board of directors, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who
has delivered timely written notice in proper form to our secretary of the stockholder's intention to bring such business before the meeting. These provisions could have the effect of delaying
stockholder actions until the next stockholder meeting that are favored by the holders of a majority of our outstanding voting securities.
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Undesignated Preferred Stock
The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue preferred stock with super voting,
special approval, dividend or
other rights or preferences on a discriminatory basis that could impede the success of any attempt to acquire us. These and other provisions may have the effect of deferring, delaying or discouraging
hostile takeovers or changes in control of us.
Super-Majority Voting
Our certificate of incorporation requires a 67% stockholder vote for the amendment, repeal or modification of certain provisions of our certificate
of incorporation and by-laws relating to the classification of our board of directors, the requirement that stockholder actions be effected at a duly called meeting, and the designated parties
entitled to call a special meeting of the stockholders. The combination of the classification of our board of directors, the lack of cumulative voting and the 67% stockholder voting requirements will
make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board of
directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In
addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the
success of any attempt to change control of our company.
These
above provisions may have the effect of deterring hostile takeovers, delaying, or preventing changes in control of our management or our company, such as a merger, reorganization or tender
offer. These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage certain types of transactions that
may involve an actual or threatened acquisition of us. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage
certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may
inhibit fluctuations in the market price of our shares that could result from actual or rumored takeover attempts. Such provisions may also have the effect of preventing changes in our management.
Section 203 of the Delaware General Corporation Law
We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
•
before such date, our board of directors approved either the business combination or the transaction that resulted in the
stockholder becoming an interested holder;
•
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the
outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee
participants do not have the right
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to
determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
•
on or after such date, the business combination is approved by our board of directors and authorized at an annual or
special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66
2
/
3
% of the outstanding voting stock that is not owned by the interested
stockholder.
In
general, Section 203 defines business combination to include the following:
•
any merger or consolidation involving the corporation and the interested stockholder;
•
any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested
stockholder;
•
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of
the corporation to the interested stockholder;
•
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any
class or series of the corporation beneficially owned by the interested stockholder; or
•
the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial
benefits by or through the corporation.
In
general, Section 203 defines an "interested stockholder" as an entity or person who, together with the person's affiliates and associates, beneficially owns, or within three years prior to
the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
Limitations of Liability and Indemnification Matters
As discussed above under the section "Executive Compensation—Limitation of Liability and Indemnification of Officers and Directors,"
Delaware law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties
as directors. Our certificate of incorporation includes a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director, except for
liability:
•
for breach of duty of loyalty;
•
for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;
•
under Section 174 of the Delaware General Corporation Law (unlawful dividends or stock repurchases);
or
•
for transactions from which the director derived improper personal benefit.
Our
by-laws provide that we must indemnify and advance expenses to our directors and officers to the fullest extent authorized by Delaware law. We are also expressly authorized to, and do, carry
directors'
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and
officers' insurance for our directors, officers and certain employees for some liabilities. We believe that these indemnification provisions and insurance are useful to attract and retain
qualified directors and executive officers. If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our
directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended.
The
limitation of liability and indemnification provisions in our certificate of incorporation and by-laws may discourage stockholders from bringing a lawsuit against directors for breach of their
fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise
benefit us and our stockholders. In addition, your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement and damage awards against
directors and officers pursuant to these indemnification provisions. There is currently no pending material litigation or proceeding involving any of our directors, officers or employees for which
indemnification is sought.
In
addition to the indemnification required in our certificate of incorporation and by-laws, we have entered into indemnification agreements with each of our current directors and officers, the form
of which we included as an Exhibit to our registration statement of which this prospectus is a part. These agreements provide for the indemnification of our directors and officers for all reasonable
expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We believe that these bylaw provisions and
indemnification agreements, as well as our maintaining directors' and officers' liability insurance, help to attract and retain qualified persons as directors and officers.
A
stockholder's investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as
indemnification for liabilities arising under the Securities Act may be permitted to our directors,
officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in
the Securities Act, and is, therefore, unenforceable.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.
The Nasdaq Global Market
Our common stock is listed on The Nasdaq Global Market under the symbol BODY.
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DESCRIPTION OF CERTAIN INDEBTEDNESS
On October 20, 2010, we repaid all amounts owing under our term loan facilities of our senior credit facility described below using proceeds
from our initial public offering and terminated the facility. There were no amounts outstanding under the revolving credit facility of our senior credit facility at the time of repayment. We are
currently in negotiations for a new revolving credit facility which we anticipate will be effective by the end of the first quarter of 2011. There is no guarantee that such a facility will be entered
into on commercially reasonable terms or at all.
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SHARES ELIGIBLE FOR FUTURE SALE
Prior to our initial public offering on October 14, 2010, there was no public market for our common stock. Future sales of our common stock in
the public market could adversely affect market prices prevailing from time to time. As described below, only a limited number of shares will be available for sale shortly after this offering due to
contractual and legal restrictions on resale. Nevertheless, sales of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could adversely
affect the prevailing market price at such time and our ability to raise equity capital in the future.
Sale of Restricted Shares
Upon completion of this offering, we will have 15,505,677 shares of common stock outstanding. Of these shares of common stock, the 5,000,000 (or
5,750,000 shares if the underwriters' over-allotment is exercised in full) shares of common stock being sold in this offering will be freely tradable without restriction under the Securities
Act, except for any such shares which
may be held or acquired by an "affiliate" of ours, as that term is defined in Rule 144 promulgated under the Securities Act, which shares will be subject to the volume limitations and other
restrictions of Rule 144 described below. The remaining 4,319,393 shares of common stock held by certain of the selling stockholders upon completion of this offering will be "restricted
securities," as that phrase is defined in Rule 144, and may be resold only after registration under the Securities Act or pursuant to an exemption from such registration, including, among
others, the exemptions provided by Rules 144 and 701 under the Securities Act, which rules are summarized below. These remaining shares of common stock held by the selling stockholders upon
completion of this offering will be available for sale in the public market after the expiration of the lock-up agreements described in "Underwriting," taking into account the provisions
of Rules 144 and 701 under the Securities Act.
Rule 144
In general, under Rule 144 under the Securities Act, as in effect on the date of this prospectus, a person who is one of our affiliates and
has beneficially owned shares of our common stock for at least six months would be entitled to sell within any three-month period a number of shares that does not exceed the greater
of:
•
one percent of the number of shares of common stock then outstanding, which will equal approximately 155,056 shares
immediately after the completion of this offering; and
•
the average weekly trading volume of our common stock on The Nasdaq Global Market during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to the sale.
Sales
under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us. For a person who has not been deemed
to have been one of our affiliates at any time during the 90 days preceding a sale, sales of our securities held longer than six months, but less than one year, will be subject only to the
current public information requirement.
A
person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least one
year, including the holding period of any prior owner other than an affiliate, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice
provisions
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of
Rule 144. All shares of our common stock will qualify for resale under Rule 144 within 180 days of the date of this prospectus, subject to the lock-up agreements.
Rule 701
Rule 701 under the Securities Act, as in effect on the date of this prospectus, permits resales of shares in reliance upon Rule 144 but
without compliance with certain restrictions of Rule 144, including the holding period requirement. Most of our employees, executive officers or directors who purchased shares under a written
compensatory plan or contract may be entitled to rely on the resale provisions of Rule 701. However, substantially all Rule 701 shares are subject to lock-up agreements as
described below and under "Underwriting" included elsewhere in this prospectus and will become eligible for sale upon the expiration of the restrictions set forth in those agreements.
Lock-up Agreements
We and each of our executive officers and directors as well as all of the selling stockholders have agreed with the underwriters, that for a period
of 90 days after the date of this prospectus, we or they will not offer, sell, assign, transfer, pledge, contract to sell or otherwise dispose of or hedge any shares of our common stock or any
securities convertible into or exchangeable for shares of common stock, subject to specified exceptions. The representatives of the underwriters may, in their discretion, at any time without prior
notice, release all or any portion of the shares from the restrictions in any such agreement. See "Underwriting" for more information.
Registration Rights
We are party to a registration rights agreement which provides that holders of our common stock issued upon conversion of our Series A
preferred stock have the right to require us to register any or all of their shares under the Securities Act at our expense, subject to certain limitations. Registration of shares held by these
stockholders under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon effectiveness of the registration, subject to
the expiration of the lock-up period. See "Certain Relationships and Related Party Transactions—Registration Rights Agreement" for more information.
Equity Plans
On January 4, 2011, we filed a Form S-8 registration statement under the Securities Act to register shares of our common
stock subject to options outstanding or reserved for issuance under our Plan. Such registration statement became effective immediately upon filing, and shares covered by the Form S-8
registration statement are eligible for sale in the public markets, subject to compliance with Rule 144 limitations applicable to affiliates and any lock-up agreements. For a more
complete discussion of our stock plans, see "Executive Compensation—Compensation Discussion and Analysis—Equity-Based Compensation."
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CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS
The following is a summary of certain material U.S. federal income tax consequences of the purchase, ownership and disposition of our common stock to
a non-U.S. holder that purchases shares of our common stock in this offering. For purposes of this summary, a "non-U.S. holder" means a beneficial owner of our common stock
that is, for U.S. federal income tax purposes:
•
a nonresident alien individual;
•
a foreign corporation (or entity treated as a foreign corporation for U.S. federal income tax purposes); or
•
a foreign estate or foreign trust.
In
the case of a holder that is classified as a partnership for U.S. federal income tax purposes, the tax treatment of a partner in such partnership generally will depend upon the status of the
partner and the activities of the partner and the partnership. If you are a partner in a partnership holding our common stock, then you should consult your own tax advisor.
This
summary is based upon the provisions of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the Code, the Treasury regulations promulgated thereunder and judicial and
published administrative interpretations thereof, all as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different
from those summarized below. We cannot assure you that a change in law, possibly with retroactive application, will not alter significantly the tax considerations that we describe in this summary. We
have not sought, and do not plan to seek, any ruling from the U.S. Internal Revenue Service, which we refer to as the IRS, with respect to statements made and the conclusions reached in the following
summary, and there can be no assurance that the IRS or a court will agree with our statements and conclusions.
This
summary does not address all aspects of U.S. federal income taxes that may be relevant to non-U.S. holders in light of their personal circumstances, and does not deal with federal
taxes other than the U.S. federal income tax or with non-U.S., state or local tax considerations. Special rules, not discussed here, may apply to certain non-U.S. holders,
including:
•
U.S. expatriates and former long-term residents of the U.S.;
•
controlled foreign corporations (and their stockholders);
•
passive foreign investment companies (and their stockholders); and
•
investors in pass-through entities that are subject to special treatment under the Code.
Such
non-U.S. holders should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.
This
summary applies only to a non-U.S. holder that holds our common stock as a capital asset (generally, property held for investment). Non-U.S. holders that hold our stock
other than as capital assets should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.
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If
you are considering the purchase of our common stock, you should consult your own tax advisor concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and
disposition of our common stock, as well as the consequences to you arising under U.S. tax laws other than the federal income tax law or under the laws of any other taxing jurisdiction.
Dividends
If we make a distribution of cash or property (other than certain stock distributions) with respect to our common stock (or certain redemptions that
are treated as distributions with respect to common stock), any such distributions will be treated as a dividend for U.S. federal income tax purposes to the extent paid from our current or accumulated
earnings and
profits (as determined under U.S. federal income tax principles). Dividends paid to you generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business by you within the U.S. and, where a tax treaty applies, that are
generally attributable to a permanent establishment or fixed base in the U.S., as defined under the applicable treaty, are not subject to the withholding tax, but instead are subject to U.S. federal
income tax on a net income basis at applicable graduated individual or corporate rates. Certain certification and disclosure requirements, including delivery of a properly executed IRS
Form W-8ECI, must be satisfied for that effectively connected income to be exempt from withholding. Any such effectively connected dividends received by a foreign corporation may be
subject to an additional "branch profits tax" at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.
If
the amount of a distribution paid on our common stock exceeds our current and accumulated earnings and profits, such excess will be allocated ratably among each share of common stock with respect
to which the distribution is paid and treated first as a tax-free return of capital to the extent of your adjusted tax basis in each such share, and thereafter as capital gain from a sale
or other disposition of such share of common stock that is taxed to you as described below under the heading "Gain on Disposition of Common Stock." Your adjusted tax basis is generally the purchase
price of the shares, reduced by the amount of any such tax-free returns of capital.
If
you wish to claim the benefit of an applicable treaty rate to avoid or reduce withholding of U.S. federal income tax for dividends, then you must (a) provide the withholding agent with a
properly completed IRS Form W-8BEN (or other applicable form) and certify under penalties of perjury that you are not a U.S. person and are eligible for treaty benefits, or
(b) if our common stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable U.S. Treasury regulations. Special certification and other
requirements apply to certain non-U.S. holders that act as intermediaries (including partnerships).
If
you are eligible for a reduced rate of U.S. federal income tax pursuant to an income tax treaty, then you may obtain a refund or credit of any excess amounts withheld by timely filing an
appropriate claim with the IRS.
Gain on Disposition of Common Stock
You generally will not be subject to U.S. federal income tax with respect to gain realized on the sale, exchange or other taxable disposition of our
common stock, unless:
•
the gain is effectively connected with a trade or business you conduct in the U.S., and, in cases in which certain tax
treaties apply, is attributable to a permanent establishment or fixed base in the U.S. as defined under the applicable treaty;
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•
if you are an individual, you are present in the U.S. for 183 days or more in the taxable year of the sale,
exchange or other taxable disposition, and certain other conditions are met; or
•
we are or have been during a specified testing period a "United States real property holding corporation" for U.S. federal
income tax purposes, and, in the case where shares of our common stock are regularly traded on an established securities market, you have owned, directly or indirectly, more than 5% of our common
stock at any time within the shorter of the five-year period preceding the disposition or your holding period for your shares of our common stock. There can be no assurance that our common
stock will be treated as regularly traded on an established securities market for this purpose.
If
your gain is described in the first or third bullet point above, you will be subject to tax on the net gain derived from the sale under regular graduated United States federal income tax rates or
such lower rate as may be specified by an applicable income tax treaty. If you are a foreign corporation and your gain is described in the first bullet point above, you may also be subject to a branch
profits tax at a rate of 30% or at such lower rate as may be specified by an applicable income tax treaty. If you are an individual described in the second bullet point above, you will be subject to a
flat 30% tax on the gain derived from the sale, which may be offset by U.S. source capital losses. The gross proceeds from transactions that generate gains described in the third bullet point above
will generally be subject to a 10% withholding tax, which you may claim as a credit against your federal income tax liability.
We
believe that we have not been and are not, and we do not anticipate becoming, a "United States real property holding corporation" for U.S. federal income tax purposes. Generally, we will be a
"United States real property holding corporation" if the fair market value of our U.S. real property interests equals or exceeds 50% of the sum of the fair market values of our worldwide real property
interests and other assets used or held for use in a trade or business, all as determined for U.S. federal income tax purposes.
Information Reporting and Backup Withholding
We must report annually to the IRS and to you the amount of dividends and other distributions paid to you and the amount of tax, if any, withheld
with respect to those distributions. The IRS may make this information available to the tax authorities in the country in which you are resident.
In
addition, you may be subject to information reporting requirements and backup withholding (currently at a rate of 28%) with respect to dividends paid on, and the proceeds of disposition of, shares
of our common stock, unless, generally, you certify under penalties of perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an exemption.
Additional rules relating to information reporting requirements and backup withholding with respect to payments of the proceeds from the disposition of shares of our common stock are as
follows:
•
If the proceeds are paid to or through the U.S. office of a broker, the proceeds generally will be subject to backup
withholding and information reporting, unless you certify under penalties of perjury (usually on IRS Form W-8BEN) that you are not a U.S. person or you otherwise establish an
exemption.
•
If the proceeds are paid to or through a non-U.S. office of a broker that is not a U.S. person and is not a
foreign person with certain specified U.S. connections, which we refer to below as a "U.S.-related person", information reporting and backup withholding generally will not apply.
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•
If the proceeds are paid to or through a non-U.S. office of a broker that is a U.S. person or a U.S.-related
person, the proceeds generally will be subject to information reporting (but not to backup withholding), unless you certify under penalties of perjury (usually on IRS Form W-8BEN)
that you are not a U.S. person.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against your U.S. federal income tax liability, provided the
required information is timely furnished by you to the IRS.
Recent Legislation Relating to Foreign Accounts
Recently enacted legislation will impose withholding taxes on certain types of payments made to "foreign financial institutions" and certain other
non-U.S. entities after December 31, 2012 unless those institutions and entities meet additional certification, information reporting and other requirements. The legislation will
generally impose a 30% withholding tax on dividends on, or gross proceeds from the sale or other disposition of, our common stock paid to a foreign financial institution unless the foreign financial
institution enters into an agreement with the U.S. Treasury to, among other things, (i) undertake to identify accounts held by certain U.S. persons (including certain equity and debt holders of
such institutions) or by U.S.-owned foreign entities, (ii) annually report certain information about such accounts, and (iii) withhold 30% on payments to account holders whose actions
prevent it from complying with these reporting and other requirements. In addition, subject to certain exceptions, the legislation will impose a 30% withholding tax on the same types of payments to an
entity that is not a foreign financial institution unless the entity certifies that it does not have any substantial U.S. owners (which generally include any U.S. persons who directly or indirectly
own more than 10% of the entity) or furnishes identifying information regarding each such substantial U.S. owner. We will not pay any additional amounts to non-U.S. holders in respect of any amounts
withheld. Prospective investors should consult their tax advisors regarding this legislation.
The summary of material U.S. federal income tax consequences for non-U.S. holders provided above is included for general information purposes only. Potential purchasers of our
common stock are urged to consult their own tax advisors to determine the U.S. federal, state, local and non-U.S. tax considerations of purchasing, owning and disposing of our common
stock.
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UNDERWRITING
We and the selling stockholders have agreed to sell and the underwriters named below have severally agreed to buy, subject to the terms of the
underwriting agreement, the number of shares listed opposite their names below. Piper Jaffray & Co. and Jefferies & Company, Inc. are acting as joint book-running managers
for this offering and as representatives of the underwriters. The underwriters are severally committed to purchase and pay for all of the shares if any are purchased.
Underwriters
Number
of Shares
Piper Jaffray & Co.
Jefferies & Company, Inc.
Robert W. Baird & Co. Incorporated
William Blair & Company, L.L.C.
Oppenheimer & Co. Inc.
Total
5,000,000
The underwriters have advised us and the selling stockholders that they propose to offer the shares of our common stock to the public at $         per
share. The underwriters propose to offer the shares to certain dealers at the same price less a concession of not more than $         per share. The underwriters may allow and the dealers may
re-allow a concession of not more than $         per share on sales to certain other brokers and dealers. After this offering, these figures may be changed by the underwriters.
The
selling stockholders have granted to the underwriters an option to purchase up to an additional 750,000 shares of common stock, on a pro rata basis, at the same price to the public, and with the
same underwriting discount, as set forth in the table above. The underwriters may exercise this option any time during the 30-day period after the date of this prospectus, but only to
cover over-allotments, if any. To the extent the underwriters exercise the option, each underwriter will become obligated, subject to certain conditions, to purchase approximately the same
percentage of the additional shares as it was obligated to purchase under the underwriting agreement.
The
following table shows the underwriting fees to be paid by us and the selling stockholders to the underwriters in connection with this offering. These amounts are shown assuming both no exercise
and full exercise of the over-allotment option.
Per Share
Total with No Exercise
Total with Full Exercise
Paid by us
$
$
$
Paid by the selling stockholders
$
$
$
In addition, we estimate that the expenses of this offering payable by us, other than the underwriting discounts and commissions, will be approximately
$          million.
Our
common is listed on The Nasdaq Global Market under the symbol BODY.
The
underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers' certificates and
legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the shares if any of them are purchased. If an
underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.
We and the selling
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stockholders
have agreed to indemnify the underwriters against certain liabilities, including civil liabilities under the Securities Act, or to contribute to payments that the underwriters may be
required to make in respect of those liabilities.
We
and each of our directors, executive officers and all of the selling stockholders have agreed to certain restrictions on our ability to sell additional shares of our common stock for a period of
90 days after the date of this prospectus. We have agreed not to directly or indirectly (i) offer for sale, sell, contract to sell, grant any option for the sale of, or otherwise issue
or dispose of, any shares of our common stock, options or warrants to acquire shares of our common stock, or any related security or instrument, (ii) otherwise dispose of any shares of our
common stock, options or warrants to acquire common stock, or securities exchangeable or exercisable for or convertible into common shares currently or hereafter owned either of record or beneficially
or (iii) publicly announce an intention to do any of the foregoing, in each case, without the prior written consent of Piper Jaffray & Co. The agreements provide exceptions for (i) sales
to underwriters pursuant to the underwriting agreement, (ii) our sales in connection with the exercise of options granted and the granting of options to purchase shares under our existing stock
option plans and (iii) certain other exceptions.
In
connection with our initial public offering, all of our directors, executive officers and all of our stockholders, in each case in effect at the time of our initial public offering, entered into
lock-up agreements substantially similar to the contractual lock-up described above, except that such lock-up agreements expire on April 12, 2011, subject to certain extensions if we announce
we will release earnings results.
To
facilitate this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock during and after this offering. Specifically, the
underwriters may over-allot or otherwise create a short position in our common stock
for their own account by selling more shares of common stock than have been sold to them by us and the selling stockholders. The underwriters may elect to cover any such short position by purchasing
shares of our common stock in the open market or by exercising the over-allotment option granted to the underwriters. In addition, the underwriters may stabilize or maintain the price of
our common stock by bidding for or purchasing shares of common stock in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate members or
other broker-dealers participating in this offering are reclaimed if shares of our common stock previously distributed in this offering are repurchased, whether in connection with stabilization
transactions or otherwise. The effect of these transactions may be to stabilize or maintain the market price of our common stock at a level above that which might otherwise prevail in the open market.
The imposition of a penalty bid may also affect the price of our common stock to the extent that it discourages resales of our common stock. The magnitude or effect of any stabilization or other
transaction is uncertain. These transactions may be effected on The Nasdaq Global Market or otherwise and, if commenced, may be discontinued at any time.
In
connection with this offering, some underwriters and selling group members may also engage in passive market making transactions on The Nasdaq Global Market. Passive market making consists of
displaying bids on The Nasdaq Global Market limited by the prices of independent market makers and effecting purchases limited by those prices in response to order flow. Rule 103 of
Regulation M promulgated by the SEC limits the amount of net purchases that each passive market maker may make and the displayed size of each bid. Passive market making may stabilize the market
price of our common stock at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
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This
prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or selling group members, if any, participating in this offering and one or
more of the underwriters participating in this offering may distribute prospectuses and prospectus supplements electronically. Any such allocation for online distributions will be made by the
underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters' websites and any information contained in any other website
maintained by any of the underwriters is not part of this prospectus, has not been approved and/or endorsed by us, the selling stockholders or the underwriters and should not be relied upon by
investors.
From
time to time in the ordinary course of their respective businesses, certain of the underwriters and their affiliates have and may in the future engage in commercial banking or investment banking
transactions with us and our affiliates.
Selling Restrictions
Sales outside the United States
No action has been taken in any jurisdiction (except in the U.S.) that would permit a public offering of shares of our common stock, or the
possession, circulation or distribution of this prospectus supplement, the accompanying prospectus or any other material relating to us or shares of our common stock in any jurisdiction where action
for that purpose is required. Accordingly, shares of our common stock may not be offered or sold, directly or indirectly, and none of this prospectus or any other offering material or advertisements
in connection with shares of our common stock may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country
or jurisdiction.
Each
of the underwriters may arrange to sell shares of our common stock offered hereby in certain jurisdictions outside the U.S., either directly or through affiliates, where they are permitted to do
so.
Notice to prospective investors in European Economic Area
In relation to each member state of the European Economic Area which has implemented the Prospectus Directive, or a "Relevant Member State," with
effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State, no offer of shares of our common stock has been made or will be made to the public in
that Relevant Member State, except that, with effect from and including such date, an offer of shares of our common stock may be made to the public in the Relevant Member State at any
time:
(a)
to
legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;
(b)
to
any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance
sheet of more than €43,000,000 and (iii) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
(c)
to
fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive); or
(d)
in
any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.
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For
the purposes of this provision, the expression an "offer of shares of our common stock to the public" in relation to any shares in any Relevant Member State means the communication in any form and
by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase any shares, as the same may be varied in that Relevant
Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
Notice to prospective investors in the United Kingdom
This prospectus and any other material in relation to the shares described herein is only being distributed to, and is only directed at, persons in
the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospective Directive ("qualified investors") that also (i) have professional experience in
matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the "Order", (ii) who fall
within Article 49(2)(a) to (d) of the Order or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). The
shares are only available to, and any invitation, offer or agreement to purchase or otherwise acquire such shares will be engaged in only with, relevant persons. This prospectus and its contents are
confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed
by recipients to any other person in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this prospectus or any of its contents.
The
distribution of this prospectus in the United Kingdom to anyone not falling within the above categories is not permitted and may contravene the Order. No person falling outside those categories
should treat this prospectus as constituting a promotion to him, or act on it for any purposes whatever. Recipients of this prospectus are advised that we, the underwriters and any other person that
communicates this prospectus are not, as a result solely of communicating this prospectus, acting for or advising them and are not responsible for providing recipients of this prospectus with the
protections which would be given to those who are clients of any aforementioned entities that is subject to the Financial Services Authority Rules.
Notice to prospective investors in Hong Kong
Our common stock may not be offered or sold by means of any document other than: (i) in circumstances which do not constitute an offer to the
public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), (ii) to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571, Laws of Hong
Kong) and any rules thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance. No advertisement,
invitation or other document relating our common stock may be issued, whether in Hong Kong or elsewhere, where such document is directed at, or the contents are likely to be accessed or read by, the
public of Hong Kong (except if permitted to do so under the laws of Hong Kong), other than with respect to such common stock that is intended to be disposed of only to persons outside of Hong Kong or
only to "professional investors" as defined in the Securities and Futures Ordinance and any rules thereunder.
Notice to prospective investors in Switzerland
This prospectus, as well as any other material relating to shares of our common stock which are the subject of the offering contemplated by this
prospectus, do not constitute an issue prospectus pursuant to Article 652a of the Swiss Code of Obligations. The shares will not be listed on the SWX Swiss Exchange and, therefore, the
documents relating to the shares, including, but not limited to, this prospectus, do not claim to comply with the disclosure standards of the listing rules of SWX Swiss
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Exchange
and corresponding prospectus schemes annexed to the listing rules of the SWX Swiss Exchange. The shares are being offered in Switzerland by way of a private placement, i.e. to a small
number of selected investors only, without any public offer and only to investors who do not purchase the shares with the intention to distribute them to the public. The investors will be individually
approached by us from time to time. This prospectus, as well as any other material relating to the shares, is personal and confidential and do not constitute an offer to any other person. This
prospectus may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available
to other persons without our express consent. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.
Notice to prospective investors in the Dubai International Financial Centre
This prospectus relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority. This prospectus
is intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no
responsibility for reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not approved this prospectus nor taken steps to verify the
information set out in it, and has no responsibility for it. The shares of our common stock which are the subject of the offering contemplated by this prospectus may be illiquid and/or subject to
restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should
consult an authorized financial adviser.
Notice to prospective investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document
or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares of our common stock may not be circulated or distributed, nor may the shares be offered or
sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under
Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person, or any person pursuant to Section 275 (1A), and in
accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where
the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to
hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited
investor) whose sole whole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the
beneficiaries' rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except: (i) to an
institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in
Section 275 of the SFA; (ii) where no consideration is given for the transfer; or (iii) by operation of law.
Notice to prospective investors in France
The prospectus supplement and the accompanying prospectus (including any amendment, supplement or replacement thereto) have not been prepared in
connection with the offering of our securities that has been approved by the Autorité des marchés financiers or by the competent authority of another State that is a
contracting party to the Agreement on the European Economic Area and notified to the
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Autorité
des marchés financiers; no security has been offered or sold and will be offered or sold, directly or indirectly, to the public in France except to permitted
investors, or Permitted Investors, consisting of persons licensed to provide the investment service of portfolio management for the account of third parties, qualified investors (investisseurs
qualifiés) acting for their own account and/or corporate investors meeting one of the four criteria provided in article D. 341-1 of the French Code
Monétaire et Financier and belonging to a limited circle of investors (cercle restreint d'investisseurs) acting for their own account, with "qualified investors" and "limited circle of
investors" having the meaning ascribed to
them in Article L. 411-2, D. 411-1, D. 411-2, D. 734-1, D. 744-1, D. 754-1 and D. 764-1 of the French Code
Monétaire et Financier; none of this prospectus supplement and the accompanying Prospectus or any other materials related to the offer or information contained therein relating to our
securities has been released, issued or distributed to the public in France except to Permitted Investors; and the direct or indirect resale to the public in France of any securities acquired by any
Permitted Investors may be made only as provided by articles L. 411-1, L. 411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of
the French Code Monétaire et Financier and applicable regulations thereunder.
Notice to prospective investors in Italy
The offering of the securities has not been registered pursuant to the Italian securities legislation and, accordingly, we have not offered or sold,
and will not offer or sell, our common stock in the Republic of Italy in a solicitation to the public, and that sales of our common stock in the Republic of Italy shall be effected in accordance with
all Italian securities, tax and exchange control and other applicable laws and regulations. In any case, our common stock cannot be offered or sold to any individuals in the Republic of Italy either
in the primary market or the secondary market.
We
will not offer, sell or deliver any securities or distribute copies of this prospectus or any other document relating to our common stock in the Republic of Italy except to "Professional
Investors", as defined in Article 31.2 of CONSOB Regulation No. 11522 of 2 July 1998 as amended, or "Regulation No. 11522", pursuant to Article 30.2 and 100 of
Legislative Decree No. 58 of 24 February 1998 as amended, or "Decree No. 58", or in any other circumstances where an expressed exemption to comply with the solicitation
restrictions provided by Decree No. 58 or Regulation No. 11971 of 14 May 1999 as amended applies, provided, however, that any such offer, sale or delivery of our common stock or
distribution of copies of this prospectus or any other document relating to our common stock in the Republic of Italy must be:
(a)
made
by investment firms, banks or financial intermediaries permitted to conduct such activities in the Republic of Italy in accordance with Legislative
Decree No. 385 of 1 September 1993 as amended, or "Decree No. 385," Decree No. 58, CONSOB Regulation No. 11522 and any other applicable laws and regulations;
(b)
in
compliance with Article 129 of Decree No. 385 and the implementing instructions of the Bank of Italy, pursuant to which the issue, trading
or placement of securities in Italy is subject to a prior notification to the Bank of Italy, unless an exemption, depending, inter alia, on the aggregate amount and the characteristics of our common
stock issued or offered in the Republic of Italy, applies; and
(c)
in
compliance with any other applicable notification requirement or limitation which may be imposed by CONSOB or the Bank of Italy.
Notice to prospective investors in Germany
This prospectus has not been prepared in accordance with the requirements for a securities or sales prospectus under the German Securities Prospectus
Act (Wertpapierprospektgesetz), the German Sales Prospectus Act (Verkaufsprospektgesetz), or the German Investment Act (Investmentgesetz). Neither the
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German
Federal Financial Services Supervisory Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht—BaFin) nor any other German authority has been notified of the intention to
distribute shares of our common stock in Germany. Consequently, shares of our common stock may not be distributed in Germany by way of public offering, public advertisement or in any similar manner
AND THIS PROSPECTUS AND ANY OTHER DOCUMENT RELATING TO THE OFFERING, AS WELL AS INFORMATION OR STATEMENTS CONTAINED THEREIN, MAY NOT BE SUPPLIED TO THE PUBLIC IN GERMANY OR USED IN CONNECTION WITH ANY
OFFER FOR SUBSCRIPTION OF SHARES OF OUR COMMON STOCK TO THE PUBLIC IN GERMANY OR ANY OTHER MEANS OF PUBLIC MARKETING. Shares of our common stock are being offered and sold in Germany only to qualified
investors which are referred to in Section 3, paragraph 2 no. 1, in connection with Section 2, no. 6, of the German Securities Prospectus Act, Section 8f
paragraph 2 no. 4 of the German Sales Prospectus Act, and in Section 2 paragraph 11 sentence 2 no. 1 of the German Investment Act. This prospectus is strictly for
use of the person who has received it. It may not be forwarded to other persons or published in Germany.
Notice to prospective investors in Norway
Shares of our common stock will not be offered in Norway other than (i) to investors who are deemed professional investors under
Section 5-4 of the Norwegian Securities Trading Act of 1997 as defined in Regulation no. 1424 of 9 December 2005, or "Professional Investors", (ii) to fewer
than 100 investors that are not Professional Investors or with a total consideration of less than EUR 100,000 calculated over a period of 12 months, or (iii) with a minimum subscription
amount of EUR 50,000. Consequently, no public offering will be made in
Norway and this prospectus has not been filed with or approved by any Norwegian authority. The prospectus must not be reproduced or otherwise distributed to others by the recipient.
Notice to prospective investors in Finland
This prospectus has not been prepared to comply with the standards and requirements regarding public offering set forth in the Finnish Securities
Market Act (1989/495, as amended) and it has not been approved by the Finnish Financial Supervision Authority. Shares of our common stock may not be offered, sold, advertised or otherwise marketed in
Finland under circumstances which constitute public offering of securities under Finnish law.
Acceptance of prospectus
By accepting this prospectus, the recipient hereof represents and warrants that he is entitled to receive it in accordance with the restrictions set
forth above and agrees to be bound by limitations contained herein. Any failure to comply with these limitations may constitute a violation of law.
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LEGAL MATTERS
The validity of our common stock offered by this prospectus will be passed upon for us by Foley & Lardner, LLP, Jacksonville, Florida.
Certain legal matters in connection with this offering will be passed upon for the underwriters by Paul, Hastings, Janofsky & Walker LLP, New York, New York.
EXPERTS
The consolidated financial statements as of January 2, 2010 and January 3, 2009, and for each of the three fiscal years in the period
ended January 2, 2010, included in this prospectus, have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered certified public accounting firm,
given upon the authority as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 under the Securities Act with the SEC for the shares of our common stock we are
offering by this prospectus. This prospectus does not include all of the information contained in the registration statement and the exhibits and schedules thereto. You should refer to the
registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not
necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document. We are required to file annual,
quarterly and special reports, proxy statements and other information with the SEC.
You
can read our SEC filings, including the registration statement and the exhibits and schedules thereto, at the SEC's website at
www.sec.gov
. You may
also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, DC 20549. You may also obtain copies of the documents at prescribed rates by
writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference facilities.
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BODY CENTRAL CORP.
INDEX TO CONSOLIDATED FINANCIAL INFORMATION
Page
Report of Independent Registered Certified
Public Accounting Firm
F-2
Consolidated Balance Sheets as of January 3, 2009 and January 2,
2010
F-3
Consolidated Statements of Operations for the Fiscal Years Ended
December 29, 2007, January 3, 2009 and January 2, 2010
F-4
Consolidated Statements of Stockholders' Deficit for the Fiscal Years Ended
December 29, 2007, January 3, 2009 and January 2, 2010
F-5
Consolidated Statements of Cash Flows for the Fiscal Years Ended
December 29, 2007, January 3, 2009 and January 2, 2010
F-6
Notes to Consolidated Financial
Statements
F-7
Consolidated Balance Sheets as of October 3, 2009, January 2, 2010
and October 2, 2010 (Unaudited)
F-27
Consolidated Statements of Operations for the Thirty-Nine Weeks Ended
October 3, 2009 and October 2, 2010 (Unaudited)
F-28
Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended
October 3, 2009 and October 2, 2010 (Unaudited)
F-29
Notes to Unaudited Consolidated
Financial Statements
F-30
F-1
Table of Contents
Report of Independent Registered Certified Public Accounting Firm
To
the Board of Directors and
Stockholders of Body Central Corp.:
In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' deficit and cash flows present fairly, in all material respects, the
financial position of Body Central Corp. and its subsidiaries at January 2, 2010 and January 3, 2009, and the results of their operations and their cash flows for each of the three years
in the period ended January 2, 2010 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the
Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
/s/
PricewaterhouseCoopers LLP
Jacksonville,
Florida
July 7, 2010, except for the effects of the stock split described in Note 1 as to which the date is October 13, 2010
F-2
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BODY CENTRAL CORP.
CONSOLIDATED BALANCE SHEETS
January 3,
2009
January 2,
2010
(in thousands, except
share data)
Assets
Current assets
Cash and cash equivalents
$
4,002
$
7,226
Accounts receivable, net of allowance for doubtful accounts of $23 and $16
828
910
Income taxes receivable
429
8
Inventories
14,612
12,898
Prepaid expenses
2,382
2,639
Deferred tax asset, current
917
1,167
Total current assets
23,170
24,848
Property and equipment, net
14,390
14,912
Goodwill
21,508
21,508
Intangible assets
18,557
17,824
Other assets
102
117
Total assets
$
77,727
$
79,209
Liabilities, Redeemable Preferred Stock and Stockholders' Deficit
Current liabilities
Accounts payable
$
9,252
$
9,078
Accrued expenses and other current liabilities
11,616
12,487
Current portion of long-term debt
5,000
5,250
Total current liabilities
25,868
26,815
Other liabilities
3,336
4,361
Deferred tax liability, long-term
74
1,886
Long-term debt, less current portion
38,250
33,000
Total liabilities
67,528
66,062
Commitments and contingencies (Note 8)
Redeemable Preferred Stock
Preferred Stock, Series D, $0.001 par value, no shares authorized, issued or outstanding
—
—
Preferred Stock, Series C, $0.001 par value, 30,000 shares authorized, issued and outstanding
3,268
3,418
Preferred Stock, Series A, $0.001 par value, 325,000 shares authorized, 308,820 shares issued and
outstanding
31,080
31,080
Preferred Stock, Series B, $0.001 par value, 175,000 shares authorized, 158,386 shares issued and
outstanding
15,540
15,540
Stockholders' deficit
Common Stock, $0.001 par value, 19,053,345 shares authorized, 203,235 shares issued and outstanding
—
—
Additional paid-in capital
271
289
Accumulated deficit
(39,960
)
(37,180
)
Total stockholders' deficit
(39,689
)
(36,891
)
Total liabilities, redeemable preferred stock and stockholders' deficit
$
77,727
$
79,209
Par value of issued and outstanding Common Stock is inconsequential.
The
accompanying notes are an integral part of these consolidated financial statements.
F-3
Table of Contents
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
December 29,
2007
January 3,
2009
January 2,
2010
(in thousands, except share and per share data)
Net revenues
$
195,911
$
191,824
$
198,834
Cost of goods sold, including occupancy, buying, distribution center and catalog costs
140,334
137,982
139,145
Gross profit
55,577
53,842
59,689
Selling, general and administrative expenses
51,832
45,555
46,567
Depreciation and amortization
5,469
5,357
4,678
Impairment of long-lived assets
2,428
936
196
Goodwill impairment
33,962
—
—
(Loss) income from operations
(38,114
)
1,994
8,248
Interest expense, net of interest income of $544, $140 and $21
4,215
4,329
3,956
Other expense (income), net
238
(493
)
(128
)
(Loss) income before income taxes
(42,567
)
(1,842
)
4,420
(Benefit from) provision for income taxes
(3,237
)
(890
)
1,640
Net (loss) income
$
(39,330
)
$
(952
)
$
2,780
Net (loss) income per common share:
Basic
$
(194.10
)
$
(5.42
)
$
12.94
Diluted
$
(194.10
)
$
(5.42
)
$
0.23
Weighted average common shares outstanding:
Basic
203,235
203,235
203,235
Diluted
203,235
203,235
12,173,978
The accompanying notes are an integral part of these consolidated financial statements.
F-4
Table of Contents
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
Common
Stock
Shares
Additional
Paid-In
Capital
(Accumulated
Deficit)
Retained
Earnings
Total
Stockholders'
Deficit
(in thousands, except share data)
Balance at December 30, 2006
203,235
$
397
$
322
$
719
Stock option compensation expense
28
—
28
Dividends payable on Series C Preferred Stock
—
(118
)
—
(118
)
Net loss
—
—
(39,330
)
(39,330
)
Balance at December 29, 2007
203,235
307
(39,008
)
(38,701
)
Stock option compensation expense
—
114
—
114
Dividends payable on Series C Preferred Stock
—
(150
)
—
(150
)
Net loss
—
—
(952
)
(952
)
Balance at January 3, 2009
203,235
271
(39,960
)
(39,689
)
Stock option compensation expense
—
168
—
168
Dividends payable on Series C Preferred Stock
—
(150
)
—
(150
)
Net income
—
—
2,780
2,780
Balance at January 2, 2010
203,235
$
289
$
(37,180
)
$
(36,891
)
Par value of issued and outstanding Common Stock is inconsequential.
The
accompanying notes are an integral part of these consolidated financial statements.
F-5
Table of Contents
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
December 29,
2007
January 3,
2009
January 2,
2010
(in thousands)
Cash flows from operating activities
Net (loss) income
$
(39,330
)
$
(952
)
$
2,780
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation and amortization
5,469
5,357
4,678
Stock-based compensation
28
114
168
Loss on impairment of long-lived assets
36,390
936
196
Deferred income taxes
(3,577
)
(275
)
1,561
Other non-cash charges (credits)
857
(220
)
123
Changes in assets and liabilities:
Accounts receivable
(1,919
)
1,545
(105
)
Income taxes
(3,558
)
2,834
421
Inventories
5,850
(450
)
1,714
Prepaid expenses
649
(54
)
(256
)
Accounts payable and accrued expenses
5,075
(4,791
)
697
Other assets
3
2
(15
)
Other liabilities
1,238
174
1,056
Net cash provided by operating activities
7,175
4,220
13,018
Cash flows from investing activities
Purchases of property and equipment
(9,656
)
(2,640
)
(4,809
)
Proceeds from sales of assets
—
300
15
Net cash used in investing activities
(9,656
)
(2,340
)
(4,794
)
Cash flows from financing activities
Principal payments on long-term debt
(4,500
)
(3,250
)
(5,000
)
Proceeds from issuance of preferred stock
3,000
—
—
Net cash used in financing activities
(1,500
)
(3,250
)
(5,000
)
Net (decrease) increase in cash and cash equivalents
(3,981
)
(1,370
)
3,224
Cash and cash equivalents
Beginning of year
9,353
5,372
4,002
End of year
$
5,372
$
4,002
$
7,226
Supplemental disclosures
Cash paid for interest
$
4,085
$
4,602
$
3,887
Cash paid for income taxes
3,435
136
51
Noncash financing activities
Dividends payable
$
118
$
150
$
150
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Business and Summary of Significant Accounting Policies
Nature of Business
Body Central Corp. (the "Company") is a specialty fashion retailer of young women's apparel and accessories operating retail centers in the South,
Mid-Atlantic and Midwest regions of the United States. In addition, the Company operates an e-commerce website, www.bodyc.com, and a catalog mail system. Approximately 34% of merchandise
is purchased from five manufacturers.
Stock Split
On October 13, 2010, a 25.40446-for-1 stock split of the Company's outstanding Common Stock was implemented. All Common Stock shares, per
share data, and option exercise prices in the accompanying consolidated financial statements and notes to the consolidated financial statements have been retroactively adjusted for all periods
presented to give effect to the stock split.
Principles of Consolidation
The accompanying Consolidated Financial Statements, prepared in accordance with accounting principles generally accepted in the United States of
America ("GAAP"), include the assets, liabilities, revenues and expenses of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in
consolidation.
Fiscal Year End
The Company's fiscal year ends on the Saturday closest to December 31. Fiscal years 2007, 2008 and 2009 ended on December 29, 2007,
January 3, 2009 and January 2, 2010, respectively. Fiscal years 2009 and 2007 included 52 weeks. Fiscal year 2008 included 53 weeks. References to years in the Consolidated
Financial Statements relate to fiscal years rather than calendar years.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Segment Reporting
GAAP has established guidance for reporting information about a company's operating segments, including disclosures related to a company's products
and services, geographic areas and major customers. The Company has aggregated its net revenues generated from its retail centers, e-commerce website and catalog mail system into one
operating segment. We aggregate our operating segments because they have a similar class of customer, nature of products, nature of production process and distribution methods as well as similar
economic
characteristics. The Company has no international sales. All of the Company's identifiable assets are in the United States.
Revenue Recognition
The Company recognizes revenue, and the related cost of goods sold is expensed, at point-of-sale or upon shipment to
customers. Shipping and handling fees billed to customers for online and catalog
F-7
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
sales
are included in net revenues, and the related shipping and handling costs are included in cost of goods sold. Based on historical sales returns, an allowance for sales returns is recorded as a
reduction of net revenues in the periods in which the sales are recognized. Sales tax collected from customers is excluded from net revenues and is included as part of accrued expenses and other
current liabilities on the Consolidated Balance Sheets.
The
Company sells gift certificates in its retail stores, which do not expire or lose value over periods of inactivity. The Company accounts for gift certificates by recognizing a liability at the
time a gift certificate is sold. The customer liability balance was $982,000 and $1.2 million, as of January 3, 2009 and January 2, 2010, respectively, and is included in accrued
expenses and other current liabilities on the Consolidated Balance Sheets. The Company recognizes income from gift certificates when they are redeemed by the customer.
Revenue
from unredeemed gift certificates is recognized when it is determined that the likelihood of the gift certificate being redeemed is remote and that there is no legal obligation to remit
unredeemed gift certificates to relevant jurisdictions. Revenue from gift certificate breakage is immaterial to our financial position.
Cash and Cash Equivalents
The Company considers all short-term investments with an initial maturity of three months or less when purchased to be cash equivalents.
Inventories
Inventories are comprised principally of women's apparel and accessories and are stated at the lower of cost or market, on a
first-in-first out basis, using the retail inventory method. The Company determines market value as the anticipated future selling price of the merchandise less a normal
margin. An initial markup is applied to inventory at cost in order to establish a cost-to-retail ratio. Permanent markdowns, when taken, reduce both the retail and cost
components of inventory on-hand so as to maintain the already established cost-to-retail relationship. Shipping and handling costs of $3.2 million,
$3.4 million and $3.4 million for the fiscal years ended December 29, 2007, January 3, 2009, and January 2, 2010, respectively, are included in cost of goods sold in
the Consolidated Statements of Operations.
The
Company reviews its inventory levels to identify slow-moving merchandise and generally use markdowns to clear this merchandise. The Company records a markdown reserve based on
estimated future markdowns related to current inventory to clear slow-moving inventory. These markdowns may have an adverse impact on earnings, depending on the extent and amount of
inventory affected. The markdown reserve is recorded as an increase to cost of goods sold in the Consolidated Statements of Operations. The markdown reserve was $1.7 million and
$1.6 million as of January 3, 2009 and January 2, 2010, respectively.
Included
in the carrying value of merchandise inventories is a reserve for shrinkage. Shrinkage is estimated based on historical physical inventory results as a percentage of sales. The estimate for
shrinkage reserve can be affected by changes in merchandise mix and changes in actual shrinkage
F-8
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
trends.
The shrink reserve was $416,000 and $407,000 as of January 3, 2009 and January 2, 2010, respectively.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed for
financial reporting purposes on the straight-line method using service lives ranging principally from three to fifteen years. Furniture and fixtures are typically depreciated over three to
five years. Amortization of leasehold improvements is provided on the straight-line method over the length of the lease or over the estimated useful life of the improvement, whichever is
shorter. The cost of assets sold or retired and the related accumulated depreciation or amortization is removed from the accounts with any resulting gain or loss included in net income. Major renewals
and betterments which extend service lives are capitalized, while expenditures for repairs and maintenance that do not significantly extend the life of the asset are expensed as incurred.
Impairment of Long-Lived Assets
The Company follows Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 360,
Property, Plant and Equipment
, which requires impairment losses to be recorded on long-lived assets used in operations whenever events or
changes in circumstances indicate that the net carrying amounts may not be recoverable. The evaluation is performed based on estimated undiscounted future cash flows from operating activities compared
with the carrying value of related assets for the individual stores. If the undiscounted future cash flows are less than the carrying value, an impairment loss is recognized as the difference between
the carrying value and the estimated fair value of the assets based on the discounted future cash flows of the assets using a rate that approximates the Company's weighted average cost of capital.
Goodwill
The Company follows FASB ASC 350,
Intangibles—Goodwill and Other
, regarding
goodwill and other intangible assets. Goodwill and indefinite life intangibles are subject to an assessment of impairment at least annually. The guidance under this statement requires the Company to
compare the fair value of each reporting unit with its carrying amount to determine if there is a potential impairment of goodwill. If the fair value of the reporting unit is less than its carrying
value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than its carrying value. Goodwill of $55.5 million was recognized on
the acquisition of Body Shop of America, Inc. and Catalogue Ventures, Inc on October 1, 2006. The Company recognized an impairment on this goodwill of $34.0 million associated
with its stores during the fiscal year ended December 29, 2007 as a result of the slowing economy, repositioning, competition with other retailers and operating performance of the stores. The
Company performed its annual impairment analysis as of January 3, 2009 and January 2, 2010 using the discounted cash flow and guideline public company methods to determine the fair value
of the reporting units. The Company's analysis indicated no impairment of goodwill had occurred or was at-risk as of January 3, 2009 and January 2, 2010.
F-9
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
Intangible Assets
Favorable and unfavorable retail leases and customer relationships are amortized using the straight-line method over their estimated
period of benefit, ranging from four to seven years. Trade names and trademarks are deemed to be indefinite life intangibles and are thus not subject to amortization. Management of the Company
evaluates the recoverability of intangible assets annually and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate impairment exists. The
Company's evaluation indicated no impairment of intangible assets in fiscal years ended December 27, 2007, January 3, 2009 or January 2, 2010.
Accounting for Stock Based Compensation
The Company has adopted the provisions of FASB ASC 718,
Compensation—Stock
Compensation
, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of this statement, stock-based compensation expense is
measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense on a straight-line basis over the employee's requisite service period
(generally the vesting period of the equity grant). As required under this guidance, the Company estimates forfeitures for options granted which are not expected to vest. Changes in these inputs and
assumptions can materially affect the measurement of the estimated fair value of the Company's stock-based compensation expense. Stock-based compensation expense is included in selling, general and
administrative expenses in the accompanying Consolidated Statements of Operations.
Operating Leases
The Company leases retail stores and office space under noncancelable operating leases. Most store leases contain construction allowance
reimbursements by landlords, rent escalation clauses and/or contingent rent provisions. Except for contingent rent, the Company recognizes rent expense on a straight-line basis over the
lease term and records the difference between the amount charged to expense and the rent paid as a deferred rent liability. Contingent rent, determined based on a percentage of sales in excess of
specified levels, is recognized as rent expense when achievement of the specified sales that triggers the contingent rent is probable. Cash reimbursements received from landlords for leasehold
improvements as lease incentives are also recorded as deferred rent and are amortized using the straight-line method over the lease term as an offset to rent expense.
F-10
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
Deferred Rent and Tenant Allowances
Deferred rent is recognized when a lease contains a predetermined fixed escalation of minimum rent. The Company recognizes the related rent expense
on a straight-line basis from possession date and records the differences between the recognized rental expense and the amounts payable under the lease as deferred rent. Also included in
deferred rent are tenant allowances received from landlords in accordance with negotiated lease terms. The tenant allowances are amortized as a reduction to rent expense on a straight-line
basis over the term of the lease. Deferred rent is included in other liabilities in the accompanying Consolidated Balance Sheets.
Advertising
The Company expenses advertising costs in the period in which they occurred. Advertising expense, which is classified in selling, general and
administrative expenses in the accompanying Consolidated Statements of Operations, was $2.6 million, $914,000, and $869,000 for fiscal years December 29, 2007, January 3, 2009 and
January 2, 2010, respectively.
Income Taxes
Income taxes are accounted for pursuant to FASB ASC 740,
Income Taxes,
which requires that the
Company recognize deferred tax assets, which include net operating loss carry forwards and tax credits. Deferred income taxes are determined based on the difference between the financial reporting and
tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are offset by deferred tax liabilities relating
to nondeductible temporary differences. Recognition of deferred tax assets is based on management's belief that it is more likely than not that the tax benefit associated with temporary differences
will be utilized. The FASB issued guidance requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets
will not be realized. It has been determined that valuation allowances against the deferred tax assets are not currently necessary.
The
Company follows FASB ASC 740,
Income Taxes
, guidance on accounting for uncertainty in income taxes. The standard prescribes a recognition
threshold and measurement attributable for financial statement recognition and measurement of tax positions taken or expected to be taken in tax returns. In addition, the standard provides guidance on
the de-recognition, classification and disclosure of tax positions, as well as the accounting for related interest and penalties. In May 2007, the FASB amended the guidance
associated with the criteria that must be evaluated in determining if a tax position has been effectively settled and should be recognized as a tax benefit. The Company does not have any uncertain tax
provisions recorded in its Consolidated Financial Statements.
Interest
and penalties, if any, are recognized in the provision for income taxes in the Consolidated Statements of Operations. Accrued interest and penalties, if applicable, are included within the
related tax liability line on the Consolidated Balance Sheets.
F-11
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
Cost of Goods Sold
Cost of goods sold includes the direct cost of purchased merchandise, distribution costs, all freight costs incurred to get merchandise to our stores
and our direct customers, costs incurred to produce and distribute our catalogs, store occupancy costs and buying costs. In addition, markdowns taken, markdown reserves for slow moving items and
inventory reserves are included in cost of goods sold.
Selling, General and Administrative
Selling, general and administrative expenses include operating expenses not in cost of goods sold, primarily administration, marketing, stock-based
compensation and store operating expenses.
Store Opening Costs
Store opening costs, which consist primarily of occupancy costs and payroll, are expensed as incurred and are included in selling, general and
administrative expense in the Consolidated Statements of Operations.
Insurance and Self-Insurance
The Company uses a combination of insurance and self-insurance for a number of risk management activities including workers'
compensation, general liability, automobile liability and employee-related health care benefits, a portion of which is paid by the employees. Costs related to claims are accrued based on known claims
and historical experiences of incurred but not reported claims received from our insurers. The Company believes that it has adequately reserved for its self-insurance liability, which is
capped through the use of stop-loss contracts and specified retentions with insurance companies. However, any significant variation of future claims from historical trends could cause
actual results to differ from the accrued liability.
Concentration of Credit Risk
Financial instruments subject to concentrations of credit risk consist primarily of cash. The Company places its cash with what it believes to be
high credit quality institutions. At times such instruments may be in excess of the FDIC insurance limit.
F-12
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
New Accounting Standards
In June 2009, authoritative guidance was issued which establishes the FASB ASC as the source of authoritative GAAP recognized by the FASB to
be applied by nongovernmental entities. This guidance, which was incorporated into
Generally Accepted Accounting Principles
, is effective for annual
periods ending after September 15, 2009. The Company adopted the guidance in fiscal year ended January 2, 2010 and changed certain disclosure references. This change did not have any
other impact on the Company's Consolidated Financial Statements.
In
May 2009, the FASB issued authoritative guidance included in FASB ASC 855,
Subsequent Events
. The guidance requires entities to
disclose the date through which they have evaluated subsequent events and whether that date corresponds with the release of their financial statements. The Company has evaluated subsequent events
through October 13, 2010, the date the financial statements were available for issuance.
In
August 2009, the FASB issued Accounting Standards Update (ASU) 2009-05,
Measuring Liabilities at Fair Value
(Topic 820). The objective of the new guidance is to provide clarification for the fair value measurement of liabilities, specifically providing clarification that in circumstances in which a
quoted price in an active market for an identical liability is not available, a reporting entity is required to measure fair value using certain prescribed techniques. Techniques highlighted include
using 1) the quoted price of the identical liability when traded as an asset, 2) quoted prices for similar liabilities or similar liabilities when traded as assets or 3) another
valuation technique that is consistent with the principles of fair value measurements. The new guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not
required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. Finally, the guidance clarifies that
Level 1 fair value measurements include both a quoted price in an active market for the identical liability and a quoted price for the identical liability when traded as an asset in an active
market when no adjustment to the quoted price of the asset is required. The Company's adoption of this guidance did not have a material impact on its financial position or results of operations.
In
January 2010, the FASB issued ASU 2010-06
Fair Value Measurements and Disclosures
(Topic 820):
Improving Disclosures
about Fair Value Measurements
. The new guidance requires disclosures of transfers in and out of Level 1 and 2 fair value
measurements, including a description of the reason for the transfer. The new guidance also calls for disclosures about the activity in Level 3 measurements by separately presenting information
on purchases, sales, issuances and settlements on a gross basis rather than a single net number. The guidance also clarifies 1) the level of disaggregation that should be used in completing
disclosures about fair value measurements and 2) the disclosures required in describing the inputs and valuation techniques used for both nonrecurring and recurring fair value measurements.
This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the new disclosures regarding the activity in Level 3 measurements,
which became effective for fiscal years beginning after December 15, 2010.
F-13
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Property and Equipment
Property and equipment as of January 3, 2009 and January 2, 2010 consist of the following:
January 3,
2009
January 2,
2010
(in thousands)
Furniture and fixtures
$
7,166
$
8,878
Leasehold improvements
16,609
18,703
23,775
27,581
Accumulated depreciation and amortization
(9,385
)
(12,669
)
Property and equipment, net
$
14,390
$
14,912
Depreciation and amortization expense related to property and equipment was $4.8 million, $4.7 million and $4.0 million for the fiscal
years ended December 29, 2007, January 3, 2009 and January 2, 2010, respectively.
The
Company incurred costs of $7.4 million, $1.5 million and $3.0 million for capital expenditures, excluding tenant allowances of $2.3 million, $1.2 million and
$1.8 million for the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010, respectively.
3. Intangible Assets
Identifiable intangible assets recognized on the October 1, 2006 acquisition of Body Shop of America, Inc. and Catalogue Ventures, Inc. consist of the following:
January 3, 2009
(in thousands)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Value
Amortized intangible assets
Favorable retail leases
$
3,225
$
1,319
$
1,906
Unfavorable retail leases
(190
)
(69
)
(121
)
Customer relationships
585
329
256
Total
$
3,620
$
1,579
$
2,041
Unamortized intangible assets
Trade names and trademarks
$
16,395
$
—
$
16,395
Total
$
16,395
$
—
$
16,395
F-14
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Intangible Assets (Continued)
January 2, 2010
(in thousands)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Value
Amortized intangible assets
Favorable retail leases
$
3,225
$
1,906
$
1,319
Unfavorable retail leases
(190
)
(100
)
(90
)
Customer relationships
585
475
110
Total
$
3,620
$
2,281
$
1,339
Unamortized intangible assets
Trade names and trademarks
$
16,395
$
—
$
16,395
Total
$
16,395
$
—
$
16,395
The unfavorable retail leases are included in other liabilities in the Consolidated Balance Sheets.
Aggregate
amortization expense related to intangible assets was $702,000 for each of the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010. Estimated
aggregate amortization expense for each of the three succeeding fiscal years is shown below:
Fiscal Year
(in thousands)
2010
$
665
2011
556
2012
118
$
1,339
4. Long-Term Debt
The following is a summary of long-term debt outstanding at January 3, 2009 and January 2, 2010:
January 3,
2009
January 2,
2010
(in thousands)
$27.5 million term loan, interest rate at LIBOR plus 5.25%, 8.5% as of January 2, 2010, due
September 30, 2012, principal and interest due quarterly.
$
22,250
$
17,250
$24 million term loan, interest rate at LIBOR plus 5.75%, 9.0% as of January 2,
2010, interest due quarterly; all principal due October 1, 2013.
21,000
21,000
43,250
38,250
Less current portion
(5,000
)
(5,250
)
$
38,250
$
33,000
F-15
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Long-Term Debt (Continued)
Combined maturities of long-term debt are as follows:
Fiscal Year
(in thousands)
2010
$
5,250
2011
6,375
2012
5,625
2013
21,000
$
38,250
The Company entered into an interest rate swap agreement that involves the receipt of variable rate payments based on the one-month LIBOR rate in
exchange for 5.22% fixed rate payments over the life of the swap agreement without an exchange of the underlying notional amount of $25.0 million that was terminated on November 13,
2008. The differential to be paid or received was accrued and recognized as an adjustment to interest expense as interest rates change. The interest rate swap was not designated as a cash flow hedge.
Accordingly, it was reflected at fair value on the Consolidated Balance Sheets and the related change in fair value is reflected in interest expense. The net effect of the agreement was $199,000 of
expense for the fiscal year ended January 3, 2009.
The
Company also has a revolving credit facility that provides for advances up to $15.0 million with a maturity date of October 1, 2012. There were no amounts outstanding under the
revolving line of credit as of January 3, 2009 and January 2, 2010.
Both
of the term loans and the revolving credit facility are collateralized by substantially all the Company's assets and a pledge of stock in its subsidiaries. The interest rates range from LIBOR
plus 5.25% to LIBOR plus 5.75% with interest paid quarterly with a floor for LIBOR of 3.25%.
The
terms of the loan agreements contain certain restrictive covenants, which require, among other things, the maintenance of a maximum ratio of debt to earnings before interest, taxes, depreciation
and amortization ("EBITDA"), a minimum fixed charge coverage ratio and maximum capital
expenditures. The Company received waivers of covenant violations regarding the senior leverage ratio and minimum fixed charge coverage ratio at January 3, 2009, and was in compliance with all
other covenants. The Company was in compliance with all covenants at January 2, 2010.
5. Financial Instruments
The Company follows the FASB issued guidance,
Fair Value Measurements
, which establishes a framework for measuring fair value that is based on the
inputs market participants use to determine fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The guidance under this statement describes a
hierarchy of three levels of input that may be used to measure fair value:
•
Level 1 — Inputs based on quoted prices in active markets for identical assets and liabilities.
F-16
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Financial Instruments (Continued)
•
Level 2 — Inputs other than Level 1 quoted prices, such as quoted prices for similar
assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset
or liability.
•
Level 3 — Unobservable inputs based on little market or no market activity and which are
significant to the fair value of the assets and liabilities.
The
Company's material financial instruments consist primarily of cash, accounts receivable, accounts payable, accrued expenses and long-term debt. The fair values of cash, accounts
receivable, accounts payable and accrued expenses are equal to their carrying values based on their liquidity.
The
carrying amount reported in the Consolidated Balance Sheet as of January 2, 2010 for long-term debt is $38.3 million. Using a discounted cash flow technique that
incorporates a market interest yield curve with adjustments for duration and risk profile, the Company has determined the fair value of its debt to be $37.2 million at January 2, 2010.
Considerable judgment is required in interpreting market data to develop estimates of fair value. The fair value estimate presented herein is not necessarily indicative of the amount that the Company
or the debt holders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair value.
Although
the fair value of the long-term debt is less than its carrying amount, the Company does not anticipate settling its outstanding debt at the reported fair value.
The
Company has determined the estimated fair value amounts of its financial instruments using available market information. As of January 3, 2009 and January 2, 2010, respectively, the
assets that are measured at fair value on a recurring basis include the following:
Fair Value Measurements Using
Total
January 3,
2009
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(in thousands)
Money market securities
$
508
$
508
$
—
$
—
Fair Value Measurements Using
Total
January 2,
2010
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(in thousands)
Money market securities
$
2,653
$
2,653
$
—
$
—
Money market securities, which are short-term investments of excess cash, are classified as cash and cash equivalents on the Consolidated Balance Sheets.
F-17
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Leases
The Company conducts all of its retail sales and corporate operations in leased facilities. Lease terms generally range up to ten years and provide for escalations in base rents. The Company does not
have obligations to renew the leases. Certain leases provide for contingent rentals based upon sales. Most leases also require additional payments covering real estate taxes, common area costs and
insurance.
Future
minimum rental commitments, by year and in the aggregate, under noncancelable operating leases as of January 2, 2010, are as follows:
Fiscal Year
(in thousands)
2010
$
13,802
2011
11,838
2012
8,944
2013
6,969
2014
6,279
Thereafter
15,485
Total
$
63,317
Rent expense under non cancelable operating leases was as follows:
December 29,
2007
January 3,
2009
January 2,
2010
(in thousands)
Minimum rentals
$
14,916
$
14,995
$
15,199
Contingent rentals
1,226
1,028
1,273
Total rent expense
$
16,142
$
16,023
$
16,472
7. Redeemable Preferred Stock
The Company has four classes of redeemable preferred stock detailed below. The order of liquidation
preference is Series D, C, A and B. The following is a summary of changes in each issue of redeemable preferred stock:
Redeemable Preferred Stock
Series D
Series C
Series A
Series B
(in thousands)
Balance at December 30, 2006
$
—
$
—
$
31,080
$
15,540
Preferred stock issued
—
3,000
—
—
Dividends payable
—
118
—
—
Balance at December 29, 2007
—
3,118
31,080
15,540
Dividends payable
—
150
—
—
Balance at January 3, 2009
—
3,268
31,080
15,540
Dividends payable
—
150
—
—
Balance at January 2, 2010
$
—
$
3,418
$
31,080
$
15,540
F-18
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Redeemable Preferred Stock (Continued)
Nonvoting, Nonconvertible Series D Preferred Stock
In April 2008, the Company approved the conditional authorization and issuance of up to 61,000 shares of Series D Preferred Stock, par
value $0.001 per share. This authorization will only be effective in the event that a draw is made on letters of credit issued for the account of certain stockholders of the Company to secure the
guaranty of indebtedness of the Company under the loan agreements described in Note 4. If authorized and issued, the Series D Preferred Stock will have a preference upon liquidation of
$100 per share, plus accrued dividends, senior to the Series A, B and C Preferred Stock. If authorized and issued, the holders of Series D Preferred Stock will be entitled to receive
dividends at an annual rate of 5% of $100 per share accruing quarterly beginning on the date of issuance. The shares of Series D Preferred Stock are subject to redemption rights by the holders
and the Company in certain circumstances. The Series D Preferred Stock generally is nonvoting except in certain circumstances.
Nonvoting, Nonconvertible Series C Preferred Stock
In March 2007, the Company issued 30,000 shares of Series C Preferred Stock in exchange for $3.0 million paid to the sellers of
shares of Body Shop of America, Inc. and Catalogue Ventures, Inc. in October 2006. The shares of Series C Preferred Stock have a preference upon liquidation of $100 per
share, plus accrued dividends. The holders of Series C Preferred Stock are entitled to receive dividends at an annual rate of 5% of $100 per share accruing quarterly beginning on the date of
issuance. The shares of Series C Preferred Stock are subject to redemption rights at the election of the holders and at the election of the Company in certain circumstances. These redemption
rights are subject to, among other things, restrictions under the Company's debt instruments. Generally, the Series C Preferred Stock is nonvoting except in certain circumstances.
Convertible Series A Preferred Stock
In October 2006, the Company issued 308,820 shares of Series A Preferred Stock for a purchase price of $100 per share to various
investors, including 15,000 shares acquired by a former member of management. Each share is currently convertible to 25.40446 shares of Common Stock of the Company at the election of the holder or
automatic conversion in certain circumstances, including an initial public offering. If the shares of Series A Preferred Stock have not converted to Common Stock, then they have a preference
upon liquidation equivalent to $100 per share. The shares have voting rights equal to the number of shares of Common Stock to which they are convertible. Series A Preferred Stock is redeemable
in the event of a sale or disposition of more than 50% of the outstanding voting stock; a consolidation or merger; or a sale, license or other transfer of all or substantially all of the assets of the
Company. Shares of Series A Preferred Stock do not participate in dividends.
F-19
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Redeemable Preferred Stock (Continued)
Convertible Series B Preferred Stock
In October 2006, the Company issued 158,386 shares of Series B Preferred Stock in exchange for a contribution by members of management
of shares of Body Shop of America, Inc. and Catalogue Ventures, Inc. prior to the purchase of the remaining shares of those companies. Each share is currently convertible to 25.40446
shares of Common Stock of the Company at the election of the holder or automatic conversion in certain circumstances, including an initial public offering. If the shares of Series B Preferred
Stock have not converted to Common Stock, then they have a preference upon liquidation equivalent to $97.49 per share. The shares have voting rights equal to the number of shares of Common Stock to
which they are convertible. Series B Preferred Stock is redeemable in the event of a sale or disposition of more than 50% of the outstanding voting stock; a consolidation or merger; or a sale,
license or other transfer of all or substantially all of the assets of the Company. Shares of Series B Preferred Stock do not participate in dividends.
8. Commitments and Contingencies
Employment Contracts
The Company is subject to employment agreements with certain executives, which provide for compensation and other certain benefits. The agreements
also provide for severance payments under certain circumstances.
Litigation
The Company is involved in various routine legal proceedings incidental to the conduct of its business. In the opinion of management, based on the
advice of in-house and external legal counsel, the lawsuits and claims pending are not likely to have a material adverse effect on the Company's financial condition, results of operations
or cash flows.
Transaction Bonus Plan
The Company is subject to a transaction bonus plan in which specified employees, including certain named executive officers, are to receive an
aggregate of up to $1.0 million upon the completion of an initial public offering of the Company's stock.
F-20
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Income Taxes
The components of the income tax (benefit) provision for the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010 are as follows:
December 27,
2007
January 3,
2009
January 2,
2010
(in thousands)
Current
Federal
$
—
$
(275
)
$
79
State
340
(340
)
—
340
(615
)
79
Deferred
Federal
(2,808
)
(394
)
1,435
State
(769
)
119
126
(3,577
)
(275
)
1,561
Total (benefit) provision
$
(3,237
)
$
(890
)
$
1,640
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of the Company's net deferred tax asset (liability) related to continuing operations at January 3, 2009 and
January 2, 2010 are as follows:
January 3,
2009
January 2,
2010
(in thousands)
Gross deferred tax assets
Reserves
$
137
$
173
Property and equipment
3,685
2,675
Accrued expenses and other current liabilities
835
598
Inventory
616
254
Stock-based compensation
189
253
Other
254
555
Credits
—
142
Net operating losses
2,235
1,459
Gross deferred tax assets
7,951
6,109
Gross deferred tax liabilities
Intangibles
(7,108
)
(6,828
)
Gross deferred tax liabilities
(7,108
)
(6,828
)
Net deferred tax asset (liability)
$
843
$
(719
)
Recognition of deferred tax assets is based upon management's belief that it is more likely than not that a tax benefit associated with temporary differences
will be utilized. A valuation allowance has not been recorded as it is more likely than not that all deferred tax assets will be realized. At January 2, 2010, the Company had deferred tax
assets related to net operating loss carryforwards of
F-21
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Income Taxes (Continued)
approximately
$1.5 million which, if not utilized to reduce taxable income in future periods, will expire in 2028. As of the date of the audit, the Company is currently not under any
examination by any significant taxing authorities and the tax years that remain subject to examination by major tax jurisdictions under the statute of limitations are our fiscal years ended
January 3, 2009 and forward. The effective rate differs from the statutory rate due to the following items:
December 29,
2007
January 3,
2009
January 2,
2010
Statutory rate
(34.0
)%
(34.0
)%
34.0
%
State and local income taxes, net of federal benefit
(4.3
)
(4.3
)
4.5
State tax true-up
—
(7.8
)
—
Goodwill impairment
30.8
—
—
Other
(0.1
)
(2.2
)
(1.4
)
(Benefit from) provision for income tax rate
(7.6
)%
(48.3
)%
37.1
%
10. Stock-Based Compensation Plans
The Company adopted an equity incentive plan in September 2006 (the "Plan"). The Plan provides for the grant of options and other Company stock awards to employees, directors and consultants,
not to exceed 1,341,355 shares of Common Stock. The plan provides for benefits in the form of incentive stock options. Options granted to employees and directors under the Plan vest over a period of
four years and expire five to ten years from the date of grant. Options to purchase 377,256 shares of Common Stock were available for future grants under the Plan at January 2, 2010.
The
Company estimates the fair value of each option award on the date of the grant using the Black-Scholes option valuation model. Estimates of fair value are not intended to predict actual future
events or the value ultimately realized by persons who receive equity awards. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the
expected option term, expected volatility of the Company's stock over the option's expected term, the risk-free interest rate over the option's expected term and the Company's expected
annual dividend yield. The Company issues new shares with the exercise of options.
The
fair value of each option grant for the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010 was estimated on the grant date using the Black-Scholes
option-pricing model with the following assumptions:
December 29,
2007
January 3,
2009
January 2,
2010
Expected option term
(1)
5.75 - 6 years
6.25 years
6.25 years
Expected volatility factor
(2)
53 - 60%
66.1%
71.0%
Risk-free interest rate
(3)
3.45% - 4.55%
1.8%
3.1%
Expected annual dividend yield
0%
0%
0%
(1)
Since
there was not sufficient historical information for grants with similar terms, the simplified or "plain-vanilla" method of estimating
option life was utilized.
(2)
The
stock volatility for each grant is measured using the weighted average of historical weekly price changes of the Company's competitors'
common stock over the most recent period equal to the expected option life of the grant.
(3)
The
risk-free interest rate for periods equal to the expected term of the share option is based on the rate of treasury securities
with the same term as the option as of the grant date.
F-22
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Stock-Based Compensation Plans (Continued)
A summary of stock option information for the fiscal year ended January 2, 2010 is as follows:
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term
Outstanding at January 3, 2009
377,256
$
2.30
Granted
586,843
3.94
Exercised
—
—
Forfeited
—
—
Outstanding at January 2, 2010
964,099
$
3.29
Exercisable at January 2, 2010
217,437
$
2.69
7.9 years
The aggregate intrinsic value of outstanding and exercisable stock options, representing the excess of the average market price of the Company's stock on
January 2, 2010 over the exercise price, multiplied by the applicable number of in-the-money options, was $128,000, at January 2, 2010. There were 91,985
in-the-money options outstanding and exercisable at January 2, 2010.
A
summary of the status of nonvested stock options as of January 2, 2010 and changes during the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010
are presented below:
Shares
Weighted-
Average
Grant-Date
Fair Value
Nonvested at December 30, 2006
670,676
$
1.05
Granted
368,873
0.46
Vested
(97,248
)
0.93
Forfeited
(783,016
)
0.93
Nonvested at December 29, 2007
159,285
$
0.44
Granted
209,587
0.76
Vested
(75,451
)
0.46
Forfeited
—
Nonvested at January 3, 2009
293,421
$
0.67
Granted
586,843
1.27
Vested
(133,602
)
0.66
Forfeited
—
Nonvested at January 2, 2010
746,662
$
1.14
Stock-based compensation expense of $28,000, $114,000 and $168,000 for the fiscal years ended December 29, 2007, January 3, 2009 and
January 2, 2010, respectively, is included in selling, general and administrative expenses on the Company's Consolidated Statements of Operations. The Company did not capitalize any expense
related to stock-based payments. Total compensation cost related to nonvested awards not yet recognized was $666,000 as of January 2, 2010, and is expected to be recognized over a weighted
average remaining period of 1.5 years.
F-23
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. Accrued Expenses and Other Current Liabilities
The major components of accrued expenses and other current liabilities are as follows:
January 3,
2009
January 2,
2010
(in thousands)
Accrued payroll and related taxes
$
2,279
$
3,234
Accrued occupancy
1,820
1,930
Taxes, other than income taxes
1,549
1,505
Other
5,968
5,818
Total accrued expenses and other current liabilities
$
11,616
$
12,487
12. Savings Plan
The Company provides a savings plan (the "Savings Plan") under Section 401(k) of the Internal Revenue Code. The Savings Plan covers all employees who have attained age 21 and completed
at least 1,000 hours of service in a twelve consecutive month period. The Savings Plan requires specified contributions by the employees and allows discretionary contributions by the Company.
Total employer contribution expense was approximately $177,000, $145,000 and $153,000 for the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010,
respectively.
13. Related Parties
The Company leases office and warehouse space under a noncancelable lease agreement dated October 1, 2006 with a company that is owned by certain members of management who are also stockholders
of the Company. The lease expires on October 1, 2016. The Company incurred rent expense of $438,000, $446,000 and $468,000 for the fiscal years ended December 29, 2007, January 3,
2009 and January 2, 2010, respectively, related to this lease.
14. Fair Value Measurements
Assets and liabilities measured at fair value on a nonrecurring basis consist of the following at January 2, 2010:
Basis of Fair Value Measurements
Fair Value
of Assets
(Liabilities)
Quoted
Prices in
Active
Markets
for Identical
Items
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(in thousands)
Fiscal year ended January 2, 2010
Long-lived assets held and used
$
6,800
$
—
$
—
$
6,800
F-24
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. Fair Value Measurements (Continued)
In the fiscal year ended January 2, 2010, long-lived assets held and used in the Company's stores with a carrying value of
$7.0 million were written down to their fair value of $6.8 million. The inputs used to calculate the fair value of these store assets included the projected cash flows and
risk-adjusted rate of return that the Company estimated would be used by a market participant in valuing these assets. Utilizing this analysis, the Company recognized impairment charges of
$2.4 million, $936,000 and $196,000 related to store assets for the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010, respectively.
15. Quarterly Results (Unaudited)
The following table presents summarized unaudited quarterly financial results of operations for the Company for the fiscal years ended January 3, 2009 and January 2, 2010. We believe all
necessary adjustments have been included in the amounts stated below to present fairly the following selected information when read in conjunction with the Consolidated Financial Statements and Notes
thereto included elsewhere herein. Future quarterly operating results may fluctuate depending on a number of factors. Results for any particular quarter are not necessarily indicative of results of
operations a full fiscal year or any other quarter.
Fiscal 2008
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(in thousands, except per share data)
Net revenues
$
44,783
$
50,921
$
44,518
$
51,602
Gross profit
11,850
14,458
12,656
14,878
Net (loss) income
(2,428
)
787
(674
)
1,363
Basic (loss) income per common share
$
(12.13
)
$
3.69
$
(3.50
)
$
6.52
Dilutive (loss) income per common share
$
(12.13
)
$
0.07
$
(3.50
)
$
0.11
Fiscal 2009
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(in thousands, except per share data)
Net revenues
$
48,628
$
52,159
$
44,860
$
53,187
Gross profit
14,128
14,956
13,635
16,970
Net income
273
747
284
1,476
Basic income per common share
$
1.16
$
3.49
$
1.21
$
7.08
Dilutive income per common share
$
0.02
$
0.06
$
0.02
$
0.12
The sum of the quarterly (loss) income per common share may not equal the full year amount as the computations of the weighted average common shares outstanding
for basic and diluted shares outstanding for each quarter and the full year are performed independently.
F-25
Table of Contents
BODY CENTRAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Earnings per Share
Basic earnings per common share is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per
common share includes the determinants of basic earnings per common share plus the additional dilution for all potentially dilutive stock options and convertible preferred stock utilizing the treasury
stock method and if-converted method, respectively.
The
following table shows the amounts used in computing earnings per share and the effect on net income and the weighted average number of shares potentially dilutive to Common Stock:
December 29,
2007
January 3,
2009
January 2,
2010
(in thousands, except share and per share data)
Net (loss) income as reported
$
(39,330
)
$
(952
)
$
2,780
Less: Preferred stock dividends declared
(118
)
(150
)
(150
)
Net (loss) income attributable to
common stockholders
$
(39,448
)
$
(1,102
)
$
2,630
Weighted average basic common shares
203,235
203,235
203,235
Impact of dilutive securities:
Stock options
—
—
101,628
Convertible preferred stock
—
—
11,869,115
Weighted average dilutive common shares
203,235
203,235
12,173,978
Per common share:
Basic (loss) income per share
$
(194.10
)
$
(5.42
)
$
12.94
Diluted loss (income) per share
$
(194.10
)
$
(5.42
)
$
0.23
Common
Stock equivalents totaling 11,869,115 would have been included in the diluted (loss) income per common share calculation for both fiscal years ended December 29, 2007 and
January 3, 2009, had we reported net income for these periods.
Equity
awards to purchase 167,669, 167,669, and 754,512 shares of Common Stock for the fiscal years ended December 29, 2007, January 3, 2009 and January 2, 2010, respectively,
were outstanding, but were not included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive.
F-26
Table of Contents
BODY CENTRAL CORP.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
October 2,
2010
January 2,
2010
October 3,
2009
(In thousands, except share data)
Assets
Current assets
Cash and cash equivalents
$
5,823
$
7,226
$
706
Accounts receivable, net of allowance for doubtful accounts of $16, $16 and $23
842
910
883
Inventories
17,180
12,898
16,248
Prepaid expenses and other current assets
4,287
3,814
3,845
Total current assets
28,132
24,848
21,682
Property and equipment, net of accumulated depreciation and amortization of $15,403, $12,669 and
$11,870
17,367
14,912
14,085
Goodwill
21,508
21,508
21,508
Intangible assets, net of accumulated amortization of $2,930, $2,381 and $2,198
17,275
17,824
18,007
Other assets
116
117
245
Total assets
$
84,398
$
79,209
$
75,527
Liabilities, Redeemable Preferred Stock and Stockholders' Deficit
Current liabilities
Accounts payable
$
11,618
$
9,078
$
8,424
Accrued expenses and other current liabilities
11,731
12,487
10,770
Current portion of long-term debt
6,000
5,250
6,000
Total current liabilities
29,349
26,815
25,194
Other liabilities
5,883
4,361
4,330
Deferred tax liability, long-term
3,083
1,886
—
Long-term debt, less current portion
25,518
33,000
34,500
Total liabilities
63,833
66,062
64,024
Commitments and contingencies
Redeemable Preferred Stock
Preferred stock, Series D, $0.001 par value, no shares authorized, issued or outstanding
—
—
—
Preferred stock, Series C, $0.001 par value, 30,000 shares authorized, issued and outstanding
3,531
3,418
3,381
Preferred stock, Series A, $0.001 par value, 325,000 shares authorized, 308,820 shares issued and
outstanding
31,080
31,080
31,080
Preferred stock, Series B, $0.001 par value, 175,000 shares authorized, 158,386 shares issued and
outstanding
15,540
15,540
15,540
Stockholders' deficit
Common stock, $0.001 par value, 19,053,345 shares authorized, 203,235 shares issued and outstanding
—
—
—
Additional paid-in capital
531
289
158
Accumulated deficit
(30,117
)
(37,180
)
(38,656
)
Total stockholders' deficit
(29,586
)
(36,891
)
(38,498
)
Total liabilities, redeemable preferred stock and stockholders' deficit
$
84,398
$
79,209
$
75,527
Par value of issued and outstanding Common Stock is inconsequential.
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
F-27
Table of Contents
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Thirty-Nine Weeks Ended
October 2,
2010
October 3,
2009
(in thousands, except share and per share data)
Net revenues
$
176,288
$
145,647
Cost of goods sold, including occupancy, buying, distribution center and catalog costs
118,358
103,678
Gross profit
57,930
41,969
Selling, general and administrative expenses
40,621
33,550
Depreciation and amortization
3,510
3,518
Income from operations
13,799
4,901
Interest expense, net of interest income
2,581
2,985
Other income, net of other expense
(105
)
(157
)
Income before income taxes
11,323
2,073
Provision for income taxes
4,260
769
Net income
$
7,063
$
1,304
Net income per common share:
Basic
$
34.20
$
5.86
Diluted
$
0.57
$
0.11
Weighted-average common shares outstanding:
Basic
203,235
203,235
Diluted
12,447,411
12,157,584
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-28
Table of Contents
BODY CENTRAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Thirty-Nine
Weeks Ended
October 2,
2010
October 3,
2009
(in thousands)
Cash flows from operating activities
Net income
$
7,063
$
1,304
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
3,510
3,518
Deferred income taxes
1,197
(159
)
Other non-cash charges
(361
)
(723
)
Changes in assets and liabilities:
Accounts receivable
106
43
Income taxes
(500
)
1,192
Inventories
(4,282
)
(1,636
)
Prepaid expenses and other current assets
(481
)
(516
)
Other assets
5
(75
)
Accounts payable and accrued expenses
2,254
(2,534
)
Other liabilities
2,312
1,765
Net cash provided by operating activities
10,823
2,179
Cash flows from investing activities
Purchases of property and equipment
(5,494
)
(2,725
)
Net cash used in investing activities
(5,494
)
(2,725
)
Cash flows from financing activities
Principal payments on long-term debt
(6,732
)
(2,750
)
Net cash used in financing activities
(6,732
)
(2,750
)
Net decrease in cash and cash equivalents
(1,403
)
(3,296
)
Cash and cash equivalents
Beginning of year
7,226
4,002
End of period
$
5,823
$
706
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-29
Table of Contents
BODY CENTRAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Business and Summary of Significant Accounting Policies
Nature of Business
Body Central Corp. (the "Company"), formerly known as Body Central Acquisition Corp., is a specialty retailer of young women's apparel and
accessories operating retail stores in the South, Mid-Atlantic and Midwest regions of the United States. In addition, the Company operates a direct business through its
e-commerce website,
www.bodyc.com
, and Body Central catalog.
Stock Split
On October 13, 2010, a 25.40446-for-1 stock split of the Company's outstanding Common Stock was implemented in
conjunction with the Company's initial public offering ("IPO"). All Common Stock shares, per share data, and option exercise prices in the accompanying consolidated financial statements and notes to
the consolidated financial statements have been retroactively adjusted for all periods presented to give effect to the stock split.
Principles of Consolidation
In the opinion of management, the accompanying Unaudited Consolidated Financial Statements include all adjustments, consisting of only normal
recurring adjustments, necessary for the fair statement of consolidated financial position, results of operations, and cash flows for the interim periods presented. All intercompany accounts and
transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally
accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, these Unaudited
Consolidated Financial Statements and related Notes thereto should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended January 2, 2010,
included in the Company's Registration Statement on Form S-1 (File No. 333-168014), as amended ("Registration Statement"), filed with the SEC.
Fiscal Year End
The Company's fiscal year ends on the Saturday closest to December 31. As used herein, the interim periods presented are the
thirty-nine week periods ended October 2, 2010 and October 3, 2009, respectively.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. On an ongoing basis, management evaluates its estimates and judgments, including those related to inventory valuation, property and equipment,
recoverability of long-lived assets, including intangible assets, income taxes and stock-based compensation.
F-30
Table of Contents
BODY CENTRAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
Segment Reporting
GAAP has established guidance for reporting information about a company's operating segments, including disclosures related to a company's products
and services, geographic areas and major customers. The Company has aggregated its net revenues generated from its retail stores and its direct business into one operating segment. The Company
aggregates its operating segments because they have a similar class of customer, nature of products, nature of production process and distribution methods as well as similar economic characteristics.
The Company has no international sales. All of the Company's identifiable assets are in the United States.
Inventories
Inventories are comprised principally of women's apparel and accessories and are stated at the lower of cost or market, on a
first-in-first-out basis, using the retail inventory method. Included in the carrying value of merchandise inventory, and reflected in cost of goods sold, is a
reserve for shrinkage which is accrued between physical inventory dates as a percentage of sales based on historical inventory results.
The
Company reviews its inventory levels to identify slow-moving merchandise and generally uses markdowns to clear this merchandise. The Company records a markdown reserve based on
estimated future markdowns related to current inventory to clear slow-moving inventory. These markdowns may have an adverse impact on earnings, depending on the extent and amount of
inventory affected. The markdown reserve is recorded as an increase to cost of goods sold in the Consolidated Statements of Operations.
New Accounting Standards
In August 2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2009-05,
Measuring Liabilities at Fair Value (Topic 820)
. The objective of the new guidance is to provide clarification for the fair value measurement of
liabilities, specifically providing clarification that in circumstances in which a quoted price in an active market for an identical liability is not available, a reporting entity is required to
measure fair value using certain prescribed techniques. Techniques highlighted include using 1) the quoted price of the identical liability when traded as an asset, 2) quoted prices for
similar liabilities or similar liabilities when traded as assets or 3) another valuation technique that is consistent with the principles of fair value measurements. The new guidance also
clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction
that prevents the transfer of the liability. Finally, the guidance clarifies that Level 1 fair value measurements include both a quoted price in an active market for the identical liability and
a quoted price for the identical liability when traded as an asset in an active market when no adjustment to the quoted price of the asset is required. The Company's adoption of this guidance did not
have a material impact on its financial statements or disclosures.
In
January 2010, the FASB issued ASU 2010-06,
Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements
. The new guidance requires disclosures of transfers in and out of Level 1 and 2 fair value measurements, including a description of the reason for the
transfer. The new guidance also calls for disclosures about the activity in Level 3 measurements by separately presenting information on purchases, sales, issuances and settlements on a gross
basis rather
F-31
Table of Contents
BODY CENTRAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Nature of Business and Summary of Significant Accounting Policies (Continued)
than
a single net number. The guidance also clarifies 1) the level of disaggregation that should be used in completing disclosures about fair value measurements and 2) the disclosures
required in describing the inputs and valuation techniques used for both nonrecurring and recurring fair value measurements. This guidance is effective for interim and annual reporting periods
beginning after December 15, 2009, except for the new disclosures regarding the activity in Level 3 measurements, which became effective for fiscal years beginning after
December 15, 2010.
Reclassification
A reclassification has been made to the thirty-nine weeks ended October 3, 2009 Consolidated Financial Statements in order to
conform to the presentation for the thirty-nine weeks ended October 2, 2010.
2. Financial Instruments
The FASB-issued guidance establishes a framework for measuring fair value that is based on the inputs market participants use to determine fair value of an asset or liability and
establishes a fair value hierarchy to prioritize those inputs. The guidance under this statement describes a hierarchy of three levels of input that may be used to measure fair
value:
•
Level 1 — Inputs based on quoted prices in active markets for identical assets and liabilities.
•
Level 2 — Inputs other than Level 1 quoted prices, such as quoted prices for similar
assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset
or liability.
•
Level 3 — Unobservable inputs based on little market or no market activity and which are
significant to the fair value of the assets and liabilities.
The
Company's material financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses. The fair values of cash, accounts receivable,
accounts payable and accrued expenses are equal to their carrying values based on their liquidity.
Considerable
judgment is required in interpreting market data to develop estimates of fair value. The fair value estimate presented herein is not necessarily indicative of the amount that the Company
or
the debt holders could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair value.
As
more fully described in Note 7, on October 20, 2010, the Company repaid all amounts owed under the term loan facilities of its senior credit facility using proceeds from its initial
public offering ("IPO"). The term loans were repaid at carrying value.
F-32
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BODY CENTRAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Financial Instruments (Continued)
The
Company has determined the estimated fair value amounts of its financial instruments using available market information. The assets that are measured at fair value on a recurring basis include the
following:
Fair Value Measurements Using
Total
Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(in thousands)
Money market securities:
October 2, 2010
$
1,754
$
1,754
$
—
$
—
January 2, 2010
$
2,653
$
2,653
$
—
$
—
October 3, 2009
$
—
$
—
$
—
$
—
Money market securities, which are short-term investments of excess cash, are classified as cash and cash equivalents on the Consolidated Balance
Sheets.
3. Leases
The Company conducts all of its retail sales and corporate operations in leased facilities. Lease terms generally range up to ten years and provide for escalations in base rents. The Company does not
have obligations to renew the leases. Certain leases provide for contingent rentals based upon sales. Many leases also require additional payments covering real estate taxes, common area costs and
insurance. Future minimum rental commitments, by fiscal year and in the aggregate, under noncancelable operating leases as of October 2, 2010, are as follows.
Fiscal Year
(in thousands)
2010 Remaining
$
3,835
2011
13,802
2012
10,902
2013
8,911
2014
8,123
Thereafter
19,463
Total
$
65,036
4. Income Taxes
The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for discrete events occurring in a particular period. The effective income
tax rate was 37.6% and 37.1% for the thirty-nine weeks ended October 2, 2010 and October 3,
2009, respectively. The effective rates for the thirty-nine weeks ended October 2, 2010 are higher primarily due to reduced tax credits expected to be utilized to reduce the
Company's fiscal year 2010 income tax liability.
F-33
Table of Contents
BODY CENTRAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. Income Taxes (Continued)
The
Company recognizes income tax liabilities related to unrecognized tax benefits in accordance with FASB ASC 740,
Income Taxes
, guidance related to
uncertain tax positions, and adjusts these liabilities when its judgment changes as the result of the evaluation of new information. The Company does not anticipate any significant changes to the
unrecognized tax benefits recorded at the balance sheet date within the next twelve months.
5. Related Parties
The Company leases office and warehouse space under a noncancelable lease agreement dated October 1, 2006 with a company that is owned in part by two stockholders of the Company, both of whom
are directors of the Company and one of whom is also a member of management of the Company. The lease expires on October 1, 2016. The Company incurred rent expense of $351,000 and $346,000 for
the thirty-nine weeks ended October 3, 2009 and October 2, 2010, respectively, related to this lease.
6. Earnings per Common Share
Basic earnings per common share are calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per
common share includes the determinants of basic earnings per common share plus the additional dilution for all potentially dilutive stock options and convertible securities utilizing the treasury
stock method and if-converted method, respectively.
The
following table shows the amounts used in computing earnings per share and the effect on net income and the weighted average number of shares potentially dilutive to Common Stock:
Thirty-Nine Weeks Ended
October 2, 2010
October 3, 2009
(in thousands, except share and per share data)
Net income as reported
$
7,063
$
1,304
Less: Preferred stock dividends declared
(113
)
(113
)
Net income attributable to common shareholders
$
6,950
$
1,191
Weighted average basic common shares
203,235
203,235
Impact of dilutive securities:
Stock options
375,067
85,240
Convertible securities
11,869,109
11,869,109
Weighted average dilutive common shares
12,447,411
12,157,584
Per common share:
Basic income per common share
$
34.20
$
5.86
Diluted income per common share
$
0.57
$
0.11
F-34
Table of Contents
BODY CENTRAL CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Earnings per Common Share (Continued)
Stock options to purchase 167,669 shares of Common Stock for the thirty-nine weeks ended October 3, 2009, were outstanding, but were not
included in the computation of weighted average diluted common share amounts as the effect of doing so would have been anti-dilutive.
7. Subsequent Events
On October 13, 2010, the Company amended its authorized capital stock to 150,000,000 shares of Common Stock, par value $0.001 per share, and 5,000,000 shares of undesignated preferred stock,
par value $0.001 per share.
On
October 14, 2010, the Company completed the IPO of its Common Stock which included 3,333,333 new shares sold by the Company and 1,666,667 shares sold by the Company's existing shareholders,
raising net proceeds of $40.3 million for the Company, after deducting the underwriting discount. As part of its IPO, the Company's convertible Series A and Series B Preferred
Stock were converted to 11,869,109 shares of its Common Stock.
On
October 20, 2010, using net proceeds from its IPO, the Company repaid all amounts owing under its term loan facilities of its senior credit facility, redeemed all its
non-convertible, non-voting Series C preferred stock, and paid its transaction bonus plan in which specified employees, including named executive officers, received an
aggregate $1.0 million triggered by the completion of the IPO. There were no amounts outstanding under the revolving credit facility of the Company's senior credit facility at the time of
repayment. Subsequently, the senior credit facility was terminated.
On
November 2, 2010, the underwriters closed on the full exercise of their over-allotment option granted in connection with the Company's IPO to purchase an additional 750,000
shares of the Company's Common Stock from the Company's selling stockholders. The Company did not receive any proceeds from the sale of the over-allotment shares by the selling
stockholders.
F-35
Table of Contents
5,000,000 Shares
BODY CENTRAL CORP.
Common Stock
PROSPECTUS
Piper Jaffray
Jefferies
Baird
William Blair & Company
Oppenheimer & Co.
, 2011
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses of Issuance and Distribution
The following table sets forth the fees and expenses, other than underwriting discounts and commissions, payable in connection with the registration
of the common stock hereunder. All amounts are estimates except the SEC registration fee and the FINRA filing fee.
Securities and Exchange Commission registration fee
$
11,983
FINRA filing fee
$
12,000
Accounting fees and expenses
$
100,000
Legal fees and expenses
$
250,000
Printing and engraving expenses
$
100,000
Miscellaneous expenses
$
126,017
Total expenses
$
600,000
Item 14.
Indemnification of Directors and Officers
Section 102 of the Delaware General Corporation Law permits a corporation in its certificate of incorporation or an amendment to eliminate or
limit the personal liability of its directors or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his or her duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of law or obtained an
improper personal benefit. Our certificate of incorporation provides that no director shall be personally liable to us or our stockholders for monetary damages for any breach of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability, except to the extent that Delaware law prohibits the elimination or limitation of liability of directors for breaches of
fiduciary duty.
Section 145
of the Delaware General Corporation Law provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons
serving at the request of the corporation in related capacities against expenses (including attorneys' fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the
person in connection with any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, other than an action by or in the right of the corporation, to which he or she is a party by reason of such position, if such person acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the
adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other
court shall deem proper. Section 145(g) of the Delaware General Corporation Law further authorizes a corporation to purchase and maintain insurance on behalf of any indemnified person against
any liability asserted against and incurred by such person in any indemnified capacity, or arising out of such person's status as such, regardless of whether the corporation would otherwise have the
power to indemnify under Delaware law.
II-1
Our
certificate of incorporation provides that we must indemnify our directors and officers to the fullest extent authorized by Delaware law and may also pay expenses incurred in defending any such
proceeding in advance of its final disposition upon delivery of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately that
such person is not entitled to be indemnified under this section or otherwise.
Our
by-laws provide that it will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative by reason of the fact that he or she is or was, or has agreed to become, its director or officer, or is or was serving, or has agreed to serve, at its request
as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, an "indemnitee", or by reason of any
action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding and any appeal therefrom.
We
have entered into indemnification agreements with our directors and executive officers. In general, these agreements provide that we will indemnify the director or executive officer to the fullest
extent permitted by law for claims arising in his or her capacity as a director or officer or in connection with his or her service at our request for another corporation or entity. We also maintain a
general liability insurance policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers.
The
indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our certificate of
incorporation, our by-laws, agreement, vote of stockholders or disinterested directors or otherwise.
We
expect to maintain standard policies of insurance that provide coverage (1) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful
act and (2) to us with respect to indemnification payments that we may make to such directors and officers.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the
registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
Item 15.
Recent Sales of Unregistered Securities
Set forth below is information regarding shares of common stock and preferred stock issued and options granted by us within the past three years that
were not registered under the Securities Act. Also included is the consideration, if any, received by us for such shares and options and information relating to the section of the Securities Act, or
rule of the SEC, under which exemption from registration was claimed.
(a)    Issuances of Capital Stock
(1)
Common
Stock
None.
(2)
Preferred
Stock
II-2
On
March 16, 2007, we sold an aggregate of 30,000 shares of non-convertible, non-voting Series C preferred stock to certain buyers of the Series C
preferred stock at a price per share of $100 for an aggregate purchase price of $3.0 million. The purchase price was paid by the investors from the escrow account securing certain
indemnification obligations of the investors arising from our 2006 Transaction. This transaction took place following a payment to the investors of $81.2 million by us for the purchase of the
remaining shares of Body Shop of America, Inc. and Catalogue Ventures, Inc.
(b)    Stock Option Grants
(1)  On
August 15, 2007, we granted a stock option to purchase 134,135 shares of our common stock at an exercise price of $3.94 per share to one of our employees pursuant to our
2006 Equity Incentive Plan.
(2)  On
December 5, 2007, we granted a stock option to purchase 33,534 shares of our common stock at an exercise price of $3.94 per share to one of our employees pursuant to our
2006 Equity Incentive Plan.
(3)  On
February 7, 2008, we granted stock options to purchase an aggregate 209,587 shares of our common stock at an exercise price of $0.98 per share to certain employees pursuant
to our 2006 Equity Incentive Plan.
(4)  On
October 12, 2009, we granted stock options to purchase an aggregate 586,843 shares of our common stock at an exercise price of $3.94 per share to certain employees pursuant
to our 2006 Equity Incentive Plan.
(5)  On
October 14, 2010, we granted options to certain of our employees and non-employee directors to purchase an aggregate of 130,000 shares of common stock with an
exercise price equal to $13.00 per share.
Options
to purchase shares of our common stock pursuant to our 2006 Equity Incentive Plan generally vest 25% on the first anniversary of the grant or on the first anniversary of an employee's date of
employment, with the remainder vesting in 12 equal quarterly installments thereafter.
No
underwriters were involved in the foregoing issuances of securities. The offers, sales and issuances of the securities described above were deemed to be exempt from registration under the
Securities Act in reliance upon Rule 701 of the Securities Act or Section 4(2) of the Securities Act. The offers, sales and issuances of the securities that were deemed to be exempt in
reliance on Rule 701 were transactions under compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The offers, sales and issuances of the
securities that were deemed to be exempt in reliance upon Section 4(2) were each transactions not involving any public offering, and all recipients of these securities were accredited investors
within the meaning of Rule 501 of Regulation D of the Securities Act who were acquiring the applicable securities for investment and not distribution and had represented that they could
bear the risks of the investment. Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships, to information about us.
II-3
Item 16.    Exhibits and Financial Statement Schedules
The exhibits to the registration statement are listed in the Exhibit Index to this registration statement and are incorporated by reference herein.
(b)  Financial Statement Schedules
Schedules not listed have been omitted because the information required to be set forth therein is not applicable, not material or is shown in the financial statements or notes
thereto.
Item 17.
Undertakings.
The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in
such denomination and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question
of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The
undersigned Registrant hereby undertakes that:
(1)  For
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2)  For
purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona
fide
offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Jacksonville, State of Florida, on the 27th day of January 2011.
BODY CENTRAL CORP.
By:
/s/ B. ALLEN WEINSTEIN
Name: B. Allen Weinstein
Title:
President, Chief Executive Officer and Director
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SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Body Central Corp., hereby severally constitute and appoint B. Allen Weinstein and Richard L. Walters,
and each of them singly (with full power to each of them to act alone), our true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution in
each of them for him and in his name, place and stead, and in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement,
and any other registration statement for the same offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities held on the dates indicated.
Signature
Title
Date
/s/ B. ALLEN WEINSTEIN
B. Allen Weinstein
President, Chief Executive Officer and Director (Principal Executive Officer)
January 27, 2011
/s/ RICHARD L. WALTERS
Richard L. Walters
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
January 27, 2011
/s/ BETH R. ANGELO
Beth R. Angelo
Chief Merchandising Officer, Executive Vice President, President of Direct Sales and Director
January 27, 2011
/s/ MARTIN P. DOOLAN
Martin P. Doolan
Director
January 27, 2011
/s/ SCOTT M. GALLIN
Scott M. Gallin
Director
January 27, 2011
/s/ JOHN K. HALEY
John K. Haley
Director
January 27, 2011
/s/ JERROLD S. ROSENBAUM
Jerrold S. Rosenbaum
Director
January 27, 2011
/s/ JOHN H. TURNER
John H. Turner
Director
January 27, 2011
/s/ CARLO A. VON SCHROETER
Carlo A. von Schroeter
Director
January 27, 2011
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EXHIBIT INDEX
In reviewing the agreements included as exhibits to this registration statement, please remember they are included to provide
you with information regarding their terms and are not intended to provide any other factual or disclosure information about us, our subsidiaries or other parties to the agreements. The agreements
contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the
applicable agreement and:
•
should not in all instances be treated as categorical statements of fact, but rather as a way of
allocating the risk to one of the parties if those statements prove to be inaccurate;
•
have been qualified by disclosures that were made to the other party in connection with the
negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
•
may apply standards of materiality in a way that is different from what may be viewed as material
to you or other investors; and
•
were made only as of the date of the applicable agreement or such other date or dates as may be
specified in the agreement and are subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. We acknowledge that,
notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual
provisions are required to make the statements in this registration statement not misleading. Additional information about us may be found elsewhere in the prospectus included in this registration
statement.
Exhibit No.
Description
1.1
Form of Underwriting Agreement.
3.1****
Third Amended and Restated Certificate of Incorporation of Body Central Corp.
3.2****
Amended and Restated By-Laws of Body Central Corp.
4.1****
Form of Registrant's Common Stock Certificate.
4.2*
Registration Rights Agreement, dated October 1, 2006, between Body Central Acquisition Corp. and certain investors named therein.
5.1
Opinion of Foley & Lardner LLP.
10.1****†
Amended and Restated 2006 Equity Incentive Plan.
10.2****†
Form of Incentive Stock Option Agreement under the Amended and Restated 2006 Equity Incentive Plan.
10.3****†
Form of Non-Qualified Stock Option Agreement under the Amended and Restated 2006 Equity Incentive Plan.
10.4****
Form of Indemnification Agreement made by and between Body Central Corp. and each of its directors and executive officers.
10.5**
Lease Agreement, dated as of October 1, 2006, between Powers Avenue Joint Venture and Body Shop of America, Inc.
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Exhibit No.
Description
10.6**†
Incentive Stock Option Agreement, dated October 12, 2009, between Body Central Acquisition Corp. and B. Allen Weinstein.
10.7**†
Incentive Stock Option Agreement, dated February 7, 2008, between Body Central Acquisition Corp. and Richard L. Walters.
10.8**†
Incentive Stock Option Agreement, dated August 15, 2007, between Body Central Acquisition Corp. and Richard L. Walters.
10.9**†
Incentive Stock Option Agreement, dated October 12, 2009, between Body Central Acquisition Corp. and Beth Angelo.
10.10**†
Incentive Stock Option Agreement, dated February 7, 2008, between Body Central Acquisition Corp. and Beth Angelo.
10.11****†
Employment Agreement dated November 27, 2007, among Body Shop of America, Inc., Catalogue Ventures, Inc. and Richard L. Walters.
10.12†
Amendment No. 1 to Employment Agreement dated November 27, 2007, among Body Shop of America, Inc., Catalogue Ventures, Inc. and Richard L. Walters.
10.13****†
Form of Employment Agreement between Body Central Acquisition Corp. and Beth Angelo.
10.14****†
Employment Agreement, dated July 8, 2009, among Body Central Acquisition Corp., Body Shop of America, Inc., Catalogue Ventures, Inc. and B. Allen Weinstein.
10.15****†
Amended and Restated Employment Agreement among Body Shop of America, Inc., Catalogue Ventures, Inc. and Curtis Hill, dated December 1, 2007, and Amendment No. 1 to Amended and Restated
Employment Agreement, dated February 23, 2009.
10.16*****†
Form of Letter Agreement between Body Central Acquisition Corp. and Martin Doolan.
10.17****†
Form of Letter Agreement between Body Central Acquisition Corp. and Jerrold Rosenbaum.
10.18**†
Success Bonus Plan.
14.1****
Code of Business Conduct and Ethics.
21.1
List of Subsidiaries.
23.1
Consent of Foley & Lardner LLP (included in Exhibit 5.1).
23.2
Consent of PricewaterhouseCoopers, LLP, independent registered certified public accounting firm.
24.1
Power of Attorney (included on signature page).
*
Previously
filed with the initial Registration Statement (Registration No. 333-168014) on Form S-1 filed on July 7, 2010.
**
Previously
filed with Amendment No. 1 to the Registration Statement (Registration No. 333-168014) on Form S-1 filed on August 17,
2010.
***
Previously
filed with Amendment No. 2 to the Registration Statement (Registration No. 333-168014) on Form S-1 filed on September 14,
2010.
****
Previously
filed with Amendment No. 3 to the Registration Statement (Registration No. 333-168014) on Form S-1 filed on
September 30, 2010.
****
Previously
filed with Amendment No. 5 to the Registration Statement (Registration No. 333-168014) on Form S-1 filed on
October 13, 2010.
†
Indicates
a management contract or compensatory plan or arrangement.
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