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Destination Maternity doubles second quarter profit
29 Apr '11
5 min read
Cash Dividend and Stock Split
"During the second quarter of fiscal 2011, we initiated a regular quarterly cash dividend and completed a two-for-one split of our common stock. Initiating a regular quarterly cash dividend demonstrates our confidence in the Company's financial strength and prospects for the future, and highlights our strong earnings and cash flow generation and our commitment to continue to drive shareholder value. In addition, we believe that the stock split, combined with the regular quarterly cash dividend, makes our stock even more attractive to a broader range of investors and may increase the trading liquidity of our stock.
"Over the past several years, we have used our free cash flow predominantly to pre-pay debt and, as a result, we have significantly reduced our financial leverage and our interest expense, as reflected by our total debt decreasing from $128.9 million at the end of fiscal 2005 to $42.0 million at the end of the second quarter of fiscal 2011, and our interest expense decreasing from $15.3 million in fiscal 2005 to a projected level of approximately $2.3 million in fiscal 2011. With this significant reduction in our financial leverage and interest expense, we decided it was appropriate to begin to use a portion of our earnings and cash flow to return cash to our stockholders through a regular quarterly cash dividend which can enhance the total return to our stockholders, while also potentially broadening our investor base."
Guidance for Fiscal 2011
"Looking forward, we are confident that we can continue to drive significant growth in earnings, while also growing our sales and positioning our company for continued future growth, by continuing to improve our product and customer experience, and continuing to focus on our strategic plan as summarized in our five key goals and strategic objectives discussed later under "Company Strategy." Given the continued uncertainty as to the timing and extent of a recovery in consumer spending, we continue to plan our sales and inventory conservatively.
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"During the second quarter of fiscal 2011, we initiated a regular quarterly cash dividend and completed a two-for-one split of our common stock. Initiating a regular quarterly cash dividend demonstrates our confidence in the Company's financial strength and prospects for the future, and highlights our strong earnings and cash flow generation and our commitment to continue to drive shareholder value. In addition, we believe that the stock split, combined with the regular quarterly cash dividend, makes our stock even more attractive to a broader range of investors and may increase the trading liquidity of our stock.
"Over the past several years, we have used our free cash flow predominantly to pre-pay debt and, as a result, we have significantly reduced our financial leverage and our interest expense, as reflected by our total debt decreasing from $128.9 million at the end of fiscal 2005 to $42.0 million at the end of the second quarter of fiscal 2011, and our interest expense decreasing from $15.3 million in fiscal 2005 to a projected level of approximately $2.3 million in fiscal 2011. With this significant reduction in our financial leverage and interest expense, we decided it was appropriate to begin to use a portion of our earnings and cash flow to return cash to our stockholders through a regular quarterly cash dividend which can enhance the total return to our stockholders, while also potentially broadening our investor base."
Guidance for Fiscal 2011
"Looking forward, we are confident that we can continue to drive significant growth in earnings, while also growing our sales and positioning our company for continued future growth, by continuing to improve our product and customer experience, and continuing to focus on our strategic plan as summarized in our five key goals and strategic objectives discussed later under "Company Strategy." Given the continued uncertainty as to the timing and extent of a recovery in consumer spending, we continue to plan our sales and inventory conservatively.
Click here for more details
Destination Maternity Corporation
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