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Gross profit margin up at Danier Leather

21
Jan '10

Danier Leather Inc. announced its unaudited interim consolidated financial results for the 13 week and 26 week periods ended December 26, 2009.

Net earnings during the second quarter of fiscal 2010 increased by approximately $2.0 million to $8.5 million ($1.44 per diluted share) compared with $6.5 million ($1.05 per diluted share)during the second quarter last year. For the year-to-date period, net earnings increased by $2.3 million to $5.1 million compared with $2.8 million for the corresponding period last year.

Sales for the second quarter of fiscal 2010 increased by 2% to $70.6 million from $69.1 million in the second quarter last year. Comparable store sales increased by 6%. Gross profit margin increased by 6.4% (640 basis points) to 54.4% from 48.0% resulting in a gross profit dollar increase of 16% or $5.3 million to $38.5 million from $33.2 million during the second quarter last year.

The increase in gross profit margin was due in part to a stronger Canadian dollar, reduced markdowns as compared with the second quarter last year and improved merchandise planning and purchasing.

Selling, general and administrative expenses during the second quarter of fiscal 2010 increased by $1.8 million. The increase was due to higher performance-based compensation for stores and head office staff and increased stock-based compensation resulting from to an increase in the Company's share price.

Year-to-date sales decreased by 1% to $90.6 million compared with $91.7 million for the corresponding period last year.Year-to-date comparable store sales increased by 3%. Gross profit as a percentage of revenue for the first half of the year increased by 6.4% or 640 basis points to 53.1% compared with 46.7% last year and year-to-date SG&A was $40.0 million compared with $39.0 million last year.

Danier continues to maintain a strong balance sheet with cash of $28.7 million, working capital of $43.3 million and no long-term debt.

Danier Leather Inc

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