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DESTINATION MATERNITY CORPORATION Reports Operating Results (10-Q)

May 10, 2010 | About:
10qk

10qk

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DESTINATION MATERNITY CORPORATION (DEST) filed Quarterly Report for the period ended 2010-03-31.

Destination Maternity Corporation has a market cap of $174.15 million; its shares were traded at around $27.94 with a P/E ratio of 10.75 and P/S ratio of 0.33. DEST is in the portfolios of Michael Price of MFP Investors LLC, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Store Closing, Asset Impairment and Asset Disposal Expenses. Our store closing, asset impairment and asset disposal expenses for the second quarter of fiscal 2010 increased to $0.9 million from $0.2 million for the second quarter of fiscal 2009. We incurred higher impairment charges for write-downs of long-lived assets of $0.6 million for the second quarter of fiscal 2010, as compared to $0.2 million for the second quarter of fiscal 2009. We incurred charges relating to store closings and other asset disposals of approximately $0.3 for the second quarter of fiscal 2010, as compared to a gain of $36,000 for the second quarter of fiscal 2009.

Interest Expense, Net. Our net interest expense for the second quarter of fiscal 2010 decreased by 26.8%, or $0.3 million, to $0.9 million from $1.2 million for the second quarter of fiscal 2009. This decrease was primarily due to our lower debt level, reflecting the $16.0 million of Term Loan prepayments we made in the previous 12 months, and to a much lesser extent, lower interest rates.

Net Income (Loss). Net income for the second quarter of fiscal 2010 was $2.6 million, or $0.42 per share (diluted), compared to net loss for the second quarter of fiscal 2009, of $(1.9) million, or $(0.32) per share (diluted). Net loss for the second quarter of fiscal 2009 includes goodwill impairment expense of $3.4 million, or $(0.57) per diluted share. Before the goodwill impairment expense, our net income was $1.5 million, or $0.25 per share (diluted), for the second quarter of fiscal 2009.

Store Closing, Asset Impairment and Asset Disposal Expenses. Our store closing, asset impairment and asset disposal expenses for the first six months of fiscal 2010 increased to $1.6 million from $0.2 million for the first six months of fiscal 2009. We incurred higher impairment charges for write-downs of long-lived assets of $1.2 million for the first six months of fiscal 2010, as compared to $0.4 million for the first six months of fiscal 2009. We incurred charges relating to store closings and other asset disposals of $0.4 for the first six months of fiscal 2010, as compared to charges of $0.1 million for the first six months of fiscal 2009. The first six months of fiscal 2009 also included a gain of $0.3 million from the sale of the remaining Costa Rica facility acquired in a fiscal 2002 business purchase.

Operating Income. We had operating income of $8.5 million for the first six months of fiscal 2010 compared to a loss of $(45.0) million for the first six months of fiscal 2009, which included the goodwill impairment expense. Our operating income for the first six months of fiscal 2010 of $8.5 million was $3.1 million higher than the operating income of $5.4 million for the first six months of fiscal 2009, before goodwill impairment expense. Operating income, before goodwill impairment expense, as a percentage of net sales for the first six months of fiscal 2010 increased to 3.2% from 2.0% for the first six months of fiscal 2009. The increase in operating income and operating income percentage, before goodwill impairment expense, was primarily due to our higher gross profit and lower selling, general and administrative expenses, partially offset by higher restructuring and other charges, and higher store closing, asset impairment, and asset disposal expenses.

Net Income (Loss). Net income for the first six months of fiscal 2010 was $3.9 million, or $0.62 per share (diluted), compared to net loss for the first six months of fiscal 2009, of $(48.8) million, or $(8.17) per share (diluted). Net loss for the first six months of fiscal 2009 includes goodwill impairment expense of $50.4 million, or $(8.43) per diluted share. Before the goodwill impairment expense, our net income was $1.6 million, or $0.26 per share (diluted), for the first six months of fiscal 2009.

Read the The complete Report

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