Danier Leather reports fiscal 2010 Q3 results
Danier Leather Inc. announced its unaudited interim consolidated financial results for the 13 week and 39 week periods ended March 27, 2010.
• Comparable store sales increased by 11%
• Gross profit dollars increased by 36%
• EBITDA increased by $5.0 million
• Cash increased by $7.7 million to $32.3 million from $24.6 million in the third quarter last year
• 1,120,000 Subordinate Voting Shares repurchased under a Substantial Issuer Bid
Net earnings during the third quarter of fiscal 2010 were $2.8 million ($0.48 per diluted share) compared with a net loss of $2.3 million ($0.37 loss per diluted share) during the third quarter last year. The third quarter of last year included staff reduction costs of $1.4 million ($1.0 million after tax, or $0.16 per diluted share) and a goodwill impairment charge of $0.3 million ($0.05 per diluted share). Therefore, adjusted net earnings, which excludes staff reduction costs and the goodwill impairment charge (and income taxes related to the restructuring costs and goodwill impairment charge), was $2.8 million for the third quarter of fiscal 2010 compared with an adjusted net loss of $1.0 million during the third quarter of fiscal 2009.
Sales for the third quarter of fiscal 2010 increased by 8% to $46.9 million from $43.5 million in the third quarter last year. Comparable store sales increased by 11%. Gross profit margin increased by 1,070 basis points to 52.1% from 41.4% resulting in a gross profit dollar increase of 36% or $6.4 million to $24.4 million from $18.0 million during the third quarter last year. The increase in gross profit margin was mainly due to improved merchandise planning and purchasing, a stronger Canadian dollar and reduced markdowns as compared with the third quarter last year.
Selling, general and administrative expenses ("SG&A") during the third quarter of fiscal 2010 increased by $1.1 million. The increase was due to higher performance-based compensation for store and head office staff and increased stock-based compensation primarily resulting from an increase in the Company's share price.
For the year-to-date period, net earnings increased by $7.4 million to $7.9 million ($1.33 per diluted share) compared with net earnings of $0.5 million ($0.07 per diluted share) for the corresponding period last year. As mentioned above, the third quarter of last year included staff reduction costs and a goodwill impairment charge. Therefore, adjusted net earnings for the year-to-date period were $7.8 million ($1.32 per diluted share) compared with $1.8 million ($0.28 per diluted share) during the same period last year.
Year-to-date sales increased by 2% to $137.4 million compared with $135.1 million for the corresponding period last year. Year-to-date comparable store sales increased by 5%. Gross profit as a percentage of revenue for the 39 week period ended March 27, 2010 increased by 770 basis points to 52.7% compared with 45.0% during the same period last year and year-to-date SG&A was $60.5 million compared with $58.3 million last year.