At first glance, Body Central Corp (NASDAQ:BODY) has potential to be a great value investment. Unfortunately, it would be safe to say the Body Central has not had a good year, currently the stock is down 67% year-to-date and since the beginning of 2012, the stock has fallen 86%.

Body Central

Body Central earnings

Still, looking at the company’s most recent numbers, Body Central trades at a discount to book value, has little debt and a current ratio of 1.9. In particular, Body Central’s book value per share stands at $5.1, 53% away from current levels. The company also has $0.95 per share in cash, although as I will cover below, this cash position is deteriorating rapidly.

Having said all of that, Body Central Corp (NASDAQ:BODY) is in trouble and the company’s fiscal third quarter results did not make for good reading. For example, the company’s revenue declined 10.4% during the quarter, despite opening 28 new stores during the period. Same store sales collapsed 18.3%. Nonetheless, the one bright spot in the company’s reported was the revelation that eCommerce sales were growing rapidly. Unfortunately, the company provided no concrete figures on the matter but management did state that, ‘business revenue attributed to eCommerce increase approximately threefold from prior year levels’ during the quarter. However, Body Central has not provided any numbers relating to its eCommerce business for either the fiscal third quarter of 2012 or full-year 2012, within their press releases, so it is impossible to put-together a comparison.

Body Central’s eCommerce business growth

Even with the company’s eCommerce growth, Body Central Corp (NASDAQ:BODY)’s reported a loss for the fiscal third quarter, before income tax provisions, of $15.7 million on revenues of $60.8 million. On a cash basis, the company burnt through $24.4 million in cash during the first nine months of this year, 62% of its 2012 year end cash. So, on a cash basis, unless Body Central starts selling assets, it will run out of cash around the beginning of next year.

And that’s not all! According to Body Central Corp (NASDAQ:BODY)’s balance sheet, the company only has $40.5 million worth of property, which if sold entirely, would only yield enough cash to sustain the company for around a year at current cash burn rates. Unfortunately, $27.8 million, or around 21% of Body Central’s total assets are intangibles.

Cost cutting measures

Body Central’s management have tried to be proactive, targeting cost cutting measures to shave an annualized $5 million off selling general and administration expenses by the end of 2013. The question is, will this be enough?

Based on numbers supplied for the first nine months of this year, it wont be. $5 million is only 7% of SG&A expenses year-to-date and adjusting the figures to reflect these savings, excluding impairment charges, still show an operating loss of $11.4  million. On an annualized basis this figure is likely to be much worse.

So overall, Body Central Corp (NASDAQ:BODY) might look attractive due to the fact that the stock is currently trading at a discount to its book value. However, the company is burning though cash, sales are collapsing and management’s turn-around plan is unlikely to change things.