PHILADELPHIA, April 23 /PRNewswire-FirstCall/ -- Mothers Work, Inc.
(Nasdaq: MWRK), the world's leading maternity apparel retailer, today
announced operating results for the second quarter of fiscal 2008 ended
March 31, 2008.
Net loss for the second quarter of fiscal 2008 was $(0.4) million, or
$(0.07) per common share (diluted), compared to net income for the second
quarter of fiscal 2007 of $2.6 million, or $0.41 per common share
(diluted). The net loss for the second quarter of fiscal 2008 of $(0.07)
per share was consistent with the Company's updated second quarter earnings
per share guidance range of a loss of between $(0.05) and $(0.10) per share
provided in its April 10, 2008 press release, but was below its previous
diluted earnings per share guidance range of between $0.19 and $0.35 per
share provided in its January 24, 2008 press release. Net loss before debt
repurchase charges for the second quarter of fiscal 2008 was $(0.4)
million, or $(0.06) per common share (diluted).
Net loss for the first six months of fiscal 2008 was $(0.7) million, or
$(0.13) per common share (diluted), compared to net income for the first
six months of fiscal 2007 of $4.0 million, or $0.64 per common share
(diluted). Net loss before debt repurchase charges for the first six months
of fiscal 2008 was $(0.7) million, or $(0.12) per common share (diluted),
compared to net income before debt repurchase charges for the first six
months of fiscal 2007 of $5.2 million, or $0.85 per common share (diluted).
The debt repurchase charge for the second quarter and first six months of
fiscal 2008, of $23,000 after tax, resulted from the Company's prepayment
of $5 million of its outstanding Term Loan in March 2008. The debt
repurchase charge for the first six months of fiscal 2007, of $1.3 million
after tax, resulted from the Company's redemption of $25 million of its
outstanding 11-1/4% Senior Notes in December, 2006.
Net sales for the second quarter of fiscal 2008 decreased 3.4% to
$139.0 million from $143.9 million for the second quarter of fiscal 2007.
The decrease in sales versus last year resulted primarily from a decrease
in comparable store sales and, to a lesser extent, reduced sales volume
from the ongoing closure of certain underperforming stores and decreased
sales from the Company's leased department and licensed relationships.
Comparable store sales decreased 1.7% during the second quarter of fiscal
2008 (based on 1,394 locations) versus a comparable store sales decrease of
1.6% during the second quarter of fiscal 2007 (based on 1,412 locations).
The comparable store sales decrease of 1.7% for the second quarter of
fiscal 2008 was favorably impacted by approximately 1 to 2 percentage
points due to having an extra day in February 2008 compared to February
2007 and, to a lesser extent, the earlier timing of Easter (March 23, 2008
compared to April 8, 2007). The comparable store sales decrease of 1.6% for
the second quarter of fiscal 2007 was favorably impacted by approximately 1
percentage point due to having one more Saturday in the second quarter of
fiscal 2007 compared to the second quarter of fiscal 2006. For the quarter
ended March 31, 2008, the Company opened 10 stores and closed 16 stores,
including one store closing related to a multi- brand store opening. As of
the end of March 2008, the Company operates 766 stores, 771 leased
department locations and 1,537 total retail locations, compared to 795
stores, 821 leased department locations and 1,616 total retail locations
operated at the end of March 2007. Adjusted EBITDA was $6.5 million for the
second quarter of fiscal 2008, a 43.6% decrease from the $11.5 million of
Adjusted EBITDA for the second quarter of fiscal 2007. Adjusted EBITDA is
defined in the financial tables at the end of this press release.
Net sales for the first six months of fiscal 2008 decreased 3.6% to
$281.9 million from $292.3 million for the same six months of the preceding
year. The decrease in sales versus last year resulted primarily from a
decrease in comparable store sales, and to a lesser extent, reduced sales
volume from the ongoing closure of certain underperforming stores and
decreased sales from the Company's leased department and licensed
relationships. Comparable store sales decreased 2.9% during the first six
months of fiscal 2008 (based on 1,330 locations) versus a comparable store
sales decrease of 1.9% during the first six months of fiscal 2007 (based on
1,395 locations). During the six months ended March 31, 2008, the Company
opened 17 stores, including two multi-brand stores, and closed 32 stores,
with nine of these store closings related to multi-brand store openings.
During the six months ended March 31, 2008, the Company also closed 24
leased department locations within Sears(R) stores, pursuant to mutual
agreement with Sears. As of March 31, 2008, the Company operates 477 leased
departments within Sears stores and, as we have previously disclosed, our
relationship with Sears will end in June, 2008, resulting in the closure of
our leased departments within Sears stores. Adjusted EBITDA was $13.0
million for the first six months of fiscal 2008, a 44.8% decrease from the
$23.5 million of Adjusted EBITDA for the first six months of fiscal 2007.
On March 19, 2008, the Company prepaid $5 million of its outstanding
Term Loan using borrowings under its credit facility, with such credit
facility borrowings being repaid as of March 31, 2008. At March 31, 2008,
the Company's indebtedness under the Term Loan Agreement was $84.1 million,
there were no outstanding borrowings under the credit facility and the
Company had approximately $58 million of availability under the credit
facility. The Company was in compliance with all covenants under its debt
agreements at March 31, 2008.
Rebecca Matthias, President and Chief Creative Officer of Mothers Work,
noted, "After having seen a nice improvement in our sales trend in January
and February, we saw much weaker than planned sales in March, driven by
much weaker than planned sales of Spring merchandise, which caused our
comparable store sales decline for the quarter. We attribute our weaker
than planned sales for March, and the second quarter, to: (1) the extremely
weak overall economic and retail environment, (2) unseasonably cold weather
in March throughout many regions of the United States, especially compared
to the more Spring-like weather of last March, which hurt sales of Spring
merchandise this March, and (3) to a lesser extent, some negative impact
from the more pregnancy-friendly fit of certain non-maternity fashion
trends, such as trapeze and baby-doll dresses and tops. Importantly,
though, we believe this fashion trend is diminishing in importance and
prevalence in the Spring 2008 selling season compared to a year ago, and we
believe it will continue to diminish, but we believe it is still having
some residual negative impact on sales. As a result of our much weaker than
planned sales for March, our sales for the second quarter of $139.0 million
were lower than our guidance range of $142 million to $146 million provided
in our January 24, 2008 press release, with our comparable store sales
decrease of 1.7% for the quarter falling short of our guidance range for a
comparable store sales increase of 1.0% to 3.5% for the second quarter. The
weak sales trend we have seen also resulted in us taking increased
markdowns to help manage our inventory level, which has contributed to
lower than planned gross margins. Our gross margins were also hurt due to
product cost inflation pressures, which are being felt throughout the
apparel industry, as well as from spreading fixed product overhead costs
over a smaller than planned sales volume.
"Looking forward, we continue to feel very good about our product lines
and we expect to see our sales trend improve as we experience more seasonal
temperatures compared to a year ago, begin to anniversary weaker sales
results from a year ago, and continue to refine our merchandise assortments
and our in-store merchandise presentation. However, we recognize that we
are faced with an extremely and increasingly weak overall economic and
retail environment and, thus, we are managing our inventory and
expenditures very tightly. We continue to focus on developing great
maternity product under each of our brands and on improving our sales and
profitability performance. An example of this focus is our new
patent-pending product, the Secret Fit Belly(TM), which is made of seamless
super stretch fabric that can be utilized in all types of bottoms (such as
denim pants, other pants, shorts and skirts) to provide a great,
comfortable fit with a seamless look. We continue to be very excited by the
initial sales results of our products using the Secret Fit Belly and we
plan to expand our use of this innovative garment feature.
"As of March 31, 2008, we have 41 two-brand Mimi combo stores, 3
triplex stores, and 15 Destination Maternity(R) Superstores. We believe
there is a significant opportunity to expand our multi-brand store
concepts, which we believe will generate higher sales per store and
improved store operating profit margins by reducing store expense
percentages through the efficiency of operating one larger store rather
than multiple smaller stores in a single market. In addition, in certain
cases, we believe our multi-brand store concepts will increase overall
sales in the geographical markets they serve. Opening these multi-brand
stores will typically involve closing two or more smaller stores and may
frequently result in one-time store closing costs resulting primarily from
early lease terminations. We opened two Destination Maternity Superstores
in fiscal 2007, and are targeting to open an additional six Superstores in
fiscal 2008. We are the only national retailer that is solely focused on
maternity, and we are further differentiating ourselves as the ultimate
maternity destination with these large, well-assorted, "must visit"
multi-brand store concepts. Based on our internal research, we believe that
over the next several years we have the potential to expand the Destination
Maternity chain to 50 or more total Destination Maternity Superstores in
the United States and to expand the Mimi combo store chain to 70 or more
total Mimi combo stores in the U.S.
"Over the past several years, we have increased the sales we generate
from our leased department and licensed relationships, and we are committed
to continuing this important part of our business and seeking ways to
profitably expand it over the long term. We are the exclusive maternity
apparel provider to Kohl's(R) through a licensed relationship, and have
leased department relationships with Macy's(R), Babies "R" Us(R),
Boscov's(R), Gordmans(R) and Sears(R). In September 2007, we announced that
our relationship with Sears will end in June 2008. While we are
disappointed about the end of our relationship with Sears, we feel the
decision not to proceed with a renewal was in the best interest of our
stockholders since we were unable to reach terms on a renewal which would
be favorable for Mothers Work and our stockholders. As we have previously
stated, we are focused on generating sales that also generate an adequate
return on investment and help us to increase shareholder value-we are not
interested in generating sales that do not help deliver shareholder value.
We believe that we continue to have the opportunity to profitably increase
the sales we generate from our leased department and licensed relationships
over time. We believe these growth opportunities include additional
maternity apparel department locations with our current partners as well as
developing relationships with new partners. Our continued commitment to
this strategy of expanding our leased department and licensed relationships
is also demonstrated by our new leased department relationships rolled out
during fiscal 2007 with Boscov's and Gordmans, two regional department
store chains.
"In addition, although we currently do not have any international sales
other than in Canada, we do believe there is a significant opportunity to
develop international sales beyond Canada, and we are actively analyzing
and evaluating some of these opportunities. We feel confident that the
strength of our brands and product offerings and our unmatched overall
expertise in maternity apparel will enable us to build significant
international sales volume over time. We anticipate that our initial
international strategy will include licensing or similar arrangements with
foreign partners.
"We believe our customers, particularly first-time parents, are
entering a new life stage that drives widespread changes in purchasing
needs and behavior, thus making our maternity customer a highly-valued
demographic for a range of consumer products and services companies. We
have been able to leverage the relationship we have with our customers to
earn incremental revenues, and we expect to expand these revenues over time
through a variety of marketing partnership programs utilizing our extensive
opt-in customer database and various in-store marketing initiatives, which
help introduce our customers to various baby and parent-related products
and services offered by leading third-party consumer products and services
companies. Whereas our current revenues in this area have predominantly
been derived from the pre- natal portion of our customer database, we have
taken steps to update and manage our entire customer database so we can
actively market our full opt-in customer database to a much broader range
of consumer product and services companies that market to families with
children.
"Also, we continue to expand futuretrust(R), our MasterCard(R)-based
college savings program that we market through our stores and our internet
sites. The futuretrust program enables members to help save for their
child's (or grandchild's or any other relative's or friend's) college
education when they link their futuretrust MasterCard to a tax-advantaged
529 College Savings account. Members earn rebates on all purchases with
their futuretrust MasterCard that are automatically contributed to their
529 College Savings account and can also earn additional college savings at
merchants in the futuretrust Preferred Merchant Network. We have entered
into relationships with select providers of 529 savings programs, tax
preparation services, home mortgages and real estate services for our
futuretrust members and, in the future, we anticipate further developing
our futuretrust program into a full service financial services and
information resource for our members known as the Futuretrust Family
Financial Center(TM). We anticipate that additional potential services
offered through the Futuretrust Family Financial Center may include online
banking, life insurance and other financial services needed by families
with children. We plan to offer such services through relationships with
high-quality third-party providers of these services.
"As for our outlook for the rest of fiscal 2008, we are cautiously
optimistic about seeing an improvement in our sales trend. We expect to see
our sales trend improve as we experience more seasonal temperatures
compared to a year ago, begin to anniversary weaker sales results from a
year ago, and continue to refine our merchandise assortments and our
in-store merchandise presentation. We have seen a strong improvement in our
sales trend thus far in April compared to our March sales performance, as
we have seen more Spring- like weather recently and we begin to anniversary
much weaker sales results from a year ago. Based on our sales results thus
far in April, we expect our comparable store sales for the full month of
April to be in the range of down 1% to up 3% (excluding Sears locations as
discussed below). We estimate that our comparable store sales results for
the month of April will be hurt by approximately 2 percentage points due to
Easter falling in March this year (March 23, 2008), compared to April last
year (April 8, 2007). Thus, excluding this estimated Easter shift impact,
we estimate that our comparable store sales for the full month of April
(excluding Sears locations) would be in the range of up 1% to up 5%. Since
our leased departments within Sears stores will close before the end of the
third quarter, our Sears leased departments will not be included in our
comparable store sales results beginning in April, the first month of our
fiscal third quarter.
"For the third quarter of fiscal 2008, we are targeting net sales in
the $150.0 million to $153.5 million range, based on an assumed comparable
store sales increase of 1.0% to 3.5% for the quarter (excluding Sears
locations as discussed above). Based on this targeted net sales, we are
targeting third quarter diluted earnings per common share of between $0.61
and $0.76 per share, compared to our $0.90 diluted earnings per share
before debt repurchase charges for the third quarter of fiscal 2007 ($0.17
reported diluted earnings per share for the third quarter of fiscal 2007).
"We are targeting net sales for fiscal 2008 in the $562.5 million to
$570.0 million range, representing sales of approximately down 2% to 3%
versus fiscal 2007, based on an assumed comparable store sales change of
between down 0.6% and up 0.8% for the full fiscal year, as well as
decreased sales from our leased department and licensed relationships,
including the negative sales impact of the discontinuation of our Sears
relationship during the third quarter of fiscal 2008.
"Our targeted sales for fiscal 2008 reflect our plan to open
approximately 29 to 33 new stores during the year, including approximately
7 to 9 new multi- brand stores, and our plan to close approximately 48 to
55 stores, with approximately 18 to 22 of these planned store closings
related to openings of new multi-brand stores, including our Destination
Maternity Superstores. Excluding the closure of all of the 501 Sears leased
department locations that we operated on September 30, 2007, we plan to
modestly increase our leased department locations with our existing leased
department partners during fiscal 2008. In addition, we distribute our Oh
Baby by Motherhood(TM) collection through a licensed arrangement at Kohl's
stores throughout the United States and on Kohls.com. Kohl's currently
operates 943 stores in 47 states, compared to 824 stores in 45 states a
year ago.
"We project that our gross margin for fiscal 2008 will be approximately
50.3% of net sales, a decrease from our 51.6% gross margin in fiscal 2007,
due to increased markdowns to help manage our inventory level, product cost
inflation pressures, which are being felt throughout the apparel industry,
as well as from spreading product overhead costs over a smaller sales
volume. We continue to aggressively control our expenses and plan to
realize additional expense savings. Thus, we expect our operating expenses
for fiscal 2008 to be several million dollars lower than fiscal 2007.
However, with our lower planned sales volume for fiscal 2008 versus fiscal
2007, we expect our operating expenses as a percentage of net sales for
fiscal 2008 to be flat to slightly higher versus fiscal 2007.
"Based on these assumptions, we are targeting operating income for
fiscal 2008 in the $7.6 million to $10.7 million range, compared to our
fiscal 2007 operating income of $18.7 million, and we are targeting
Adjusted EBITDA in the $27.8 million to $30.9 million range, compared to
our fiscal 2007 Adjusted EBITDA of $38.6 million. Also, based on these
assumptions, we are targeting diluted earnings per common share of between
$0.05 and $0.36 per share for fiscal 2008, compared to our $0.87 diluted
earnings per share before debt repurchase charges for fiscal 2007 and our
reported loss per share of $(0.07) per share for fiscal 2007. This earnings
guidance range is lower than our previous guidance range for fiscal 2008
diluted earnings per share of between $0.72 and $1.20 per share provided in
our January 24, 2008 press release, due to a reduction in our projected
sales and gross margin, partially offset by a reduction in our projected
operating expenses, compared to our projection in January 2008. Of course,
our ability to achieve these targeted results will depend, among other
factors, on the overall retail, economic, political and competitive
environment.
"We are planning our fiscal 2008 capital expenditures to be between
$15.5 million and $16.5 million, a reduction from our January 2008 guidance
of $16.0 to $18.5 million, and from our November 2007 guidance of $18 to
$20 million, as we continue to reduce uncommitted capital expenditures
where we can, in light of the challenging business environment. Our fiscal
2008 capital expenditures are primarily for new store openings, expanding
and relocating selected stores, store remodelings, and some continued
investment in our management information systems and for continued
distribution center automation. We expect our inventory at fiscal 2008 year
end to be essentially flat versus fiscal 2007 year end, despite generating
significantly less sales than originally planned, as we continue to tightly
plan our inventory levels relative to sales and recognize the impact of the
sell-off of the inventory related to the Sears business due to the
non-renewal of the Sears relationship. Based on these targets and plans, we
expect to generate positive free cash flow during fiscal 2008.
"We are very pleased with the reduction of our debt and ongoing
interest expense during fiscal 2007 and fiscal 2008. During fiscal 2007, we
reduced the Company's debt balance by approximately $25 million and
completed the redemption of the remaining $90 million principal amount of
our Senior Notes through a new, lower interest Term Loan financing. The
fiscal 2007 debt redemptions and refinancing also required cash payments of
$6.5 million for the debt redemption premium. At March 31, 2008, we had no
direct borrowings under our credit facility, and we had approximately $58
million of availability under our credit facility. We have $84.1 million of
outstanding Term Loan principal at March 31, 2008, which gives effect to
our $5 million Term Loan prepayment on March 19, 2008, compared to the
original $125 million principal amount of our Senior Notes that was
outstanding until we began our Senior Note debt repurchases in August 2006.
Although we have had and expect to have modest credit line borrowings from
our $65 million credit facility at times during fiscal 2008, reflecting
seasonal and other timing variations in cash flow as well as our use of
funds for the $5 million Term Loan prepayment in March 2008, we did not
have any outstanding credit line borrowings at the end of the second
quarter of fiscal 2008 and expect to have none at the end of fiscal 2008.
Our average level of borrowings under our credit facility was $6.3 million
during the first six months of fiscal 2008.
"Looking forward to fiscal 2009, we expect to generate higher earnings
than fiscal 2008, while generating significant positive free cash flow."
As announced previously, the Company will hold a conference call today
at 9:00 a.m. Eastern Time, regarding the Company's second quarter fiscal
2008 earnings, future financial guidance, and certain business initiatives.
You can participate in this conference call by calling (210) 234-0026.
Please call ten minutes prior to 9:00 a.m. Eastern Time. The passcode for
the conference call is "Mothers Work." In the event that you are unable to
participate in the call, a replay will be available through Wednesday, May
7, 2008 by calling (800) 294-5423.
Mothers Work is the world's largest designer and retailer of maternity
apparel, using its custom TrendTrack(TM) merchandise analysis and planning
system as well as its quick response replenishment process to "give the
customer what she wants, when she wants it." As of March 31, 2008, Mothers
Work operates 1,537 maternity locations, including 766 stores,
predominantly under the tradenames Motherhood Maternity(R), A Pea in the
Pod(R), Mimi Maternity(R), and Destination Maternity(R), and sells on the
web through its DestinationMaternity.com and brand-specific websites. In
addition, Mothers Work distributes its Oh Baby by Motherhood(TM) collection
through a licensed arrangement at Kohl's(R) stores throughout the United
States and on Kohls.com.
The Company cautions that any forward-looking statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995)
contained in this press release or made from time to time by management of
the Company, including those regarding expected results of operations,
liquidity and financial condition and various business initiatives, involve
risks and uncertainties, and are subject to change based on various
important factors. The following factors, among others, in some cases have
affected and in the future could affect the Company's financial performance
and actual results and could cause actual results to differ materially from
those expressed or implied in any such forward-looking statements: our
ability to successfully manage our various business initiatives, our
ability to successfully manage and retain our leased department and
licensed relationships and marketing partnerships, future sales trends in
our existing store base, weather, changes in consumer spending patterns,
raw material price increases, consumer preferences and overall economic
conditions, the impact of competition and pricing, availability of suitable
store locations, continued availability of capital and financing, ability
to hire and develop senior management and sales associates, ability to
develop and source merchandise, ability to receive production from foreign
sources on a timely basis, potential stock repurchases, potential debt
prepayments, changes in market interest rates, war or acts of terrorism,
and other factors set forth in the Company's periodic filings with the
Securities and Exchange Commission, or in materials incorporated therein by
reference.
MOTHERS WORK, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Second Quarter Ended Six Months Ended
-------------------- ------------------
3/31/08 3/31/07 3/31/08 3/31/07
-------- -------- -------- --------
Net sales $139,005 $143,857 $281,881 $292,341
Cost of goods sold 69,319 67,797 140,233 139,231
-------- -------- -------- --------
Gross profit 69,686 76,060 141,648 153,110
Selling, general and
administrative expenses 68,339 69,065 138,917 138,613
-------- -------- -------- -------
Operating income 1,347 6,995 2,731 14,497
Interest expense, net 1,858 2,790 3,724 5,922
Loss on extinguishment of debt 38 - 38 2,093
-------- -------- -------- -------
Income (loss) before income
taxes (549) 4,205 (1,031) 6,482
Income tax provision (benefit) (159) 1,640 (289) 2,528
-------- -------- -------- -------
Net income (loss) $(390) $2,565 $(742) $3,954
======== ======== ======== =======
Net income (loss) per share
- basic $(0.07) $0.44 $(0.13) $0.69
======== ======== ======== =======
Average shares outstanding
- basic 5,937 5,824 5,894 5,765
======== ======== ======== =======
Net income (loss) per share
- diluted $(0.07) $0.41 $(0.13) $0.64
======== ======== ======== =======
Average shares outstanding
- diluted 5,937 6,227 5,894 6,183
======== ======== ======== =======
Supplemental information:
Net income (loss), as
reported $(390) $2,565 $(742) $3,954
Add: loss on extinguishment
of debt, net of tax 23 - 23 1,277
-------- -------- -------- -------
Adjusted net income (loss),
before loss on extinguishment
of debt (367) 2,565 (719) 5,231
Add: stock compensation
expense, net of tax 347 316 687 603
-------- -------- -------- -------
Adjusted net income (loss),
before loss on extinguishment
of debt and stock compensation
expense $ (20) $2,881 $(32) $5,834
======== ======== ======== =======
Adjusted net income (loss)
per share - diluted, before
loss on extinguishment of debt $(0.06) $0.41 $(0.12) $0.85
======== ======== ======== =======
Adjusted net income (loss) per
share - diluted, before loss
on extinguishment of debt and
stock compensation expense $(0.00) $0.46 $(0.01) $0.94
======== ======== ======== =======
MOTHERS WORK, INC. AND SUBSIDIARIES
Selected Consolidated Balance Sheet Data
(in thousands)
(unaudited)
March 31, September 30, March 31,
2008 2007 2007
---------- -------------- ----------
Cash and cash equivalents $7,774 $ 10,130 $7,144
Inventories 100,177 100,485 98,435
Property, plant and equipment,
net 67,568 68,651 73,162
Line of credit borrowings - - -
Long-term debt 86,107 91,646 92,626
Stockholders' equity 87,477 88,523 91,903
Supplemental Financial Information
Reconciliation of Operating Income to Adjusted EBITDA(1)
and Operating Income Margin to Adjusted EBITDA Margin
(in thousands, except percentages)
(unaudited)
Second Quarter Ended Six Months Ended
-------------------- ----------------
3/31/08 3/31/07 3/31/08 3/31/07
-------------------- ----------------
Operating income $1,347 $6,995 $2,731 $14,497
Add: depreciation & amortization
expense 3,955 3,935 7,957 7,812
Add: loss on impairment of
long-lived assets 413 140 946 390
Add: loss (gain) on disposal of
assets 192 (100) 238 (163)
Add: stock compensation expense 568 519 1,126 990
-------- -------- -------- --------
Adjusted EBITDA(1) $6,475 $11,489 $12,998 $23,526
======== ======== ======== ========
Net sales $139,005 $143,857 $281,881 $292,341
======== ======== ======== ========
Operating income margin
(operating income as a
percentage of net sales) 1.0% 4.9% 1.0% 5.0%
Adjusted EBITDA margin
(Adjusted EBITDA as a percentage
of net sales) 4.7% 8.0% 4.6% 8.0%
(1) Adjusted EBITDA represents operating income before deduction for the
following non-cash charges: (i) depreciation and amortization
expense; (ii) loss on impairment of long-lived assets; (iii) (gain)
loss on disposal of assets; and (iv) stock compensation expense.
Reconciliation of Net Income (Loss) Per Share - Diluted
to Adjusted Net Income Per Share - Diluted,
Before Loss on Extinguishment of Debt and Stock Compensation Expense
(unaudited)
Projected for the Actual for the
Third Quarter Ending Third Quarter Ended
6/30/08 6/30/07
--------------------- -------------------
Net income per share - diluted $0.61 to 0.76 $0.17
Add: per share effect of loss on
extinguishment of debt - 0.73
--------------------- -------------------
Adjusted net loss per share -
diluted, before loss on
extinguishment of debt 0.61 to 0.76 0.90
Add: per share effect of stock
compensation expense 0.06 0.05
--------------------- -------------------
Adjusted net income per share -
diluted, before loss on
extinguishment of debt and
stock compensation expense $0.67 to 0.82 $0.95
===================== ===================
Projected for the Actual for the
Year Ending Year Ended
9/30/08 9/30/07
----------------- --------------
Net income (loss) per share - diluted $0.05 to 0.36 $(0.07)
Add: per share effect of loss on
extinguishment of debt 0.00 0.94
----------------- --------------
Adjusted net income per share - diluted,
before loss on extinguishment of debt 0.05 to 0.36 0.87
Add: per share effect of stock
compensation expense 0.25 0.21
----------------- --------------
Adjusted net income per share - diluted,
before loss on extinguishment of debt
and stock compensation expense $0.30 to 0.61 $1.08
================= ==============
Reconciliation of Operating Income to Adjusted EBITDA
(in millions, unaudited)
Projected for the Actual for the
Year Ending Year Ended
9/30/08 9/30/07
----------------- --------------
Operating income $7.6 to 10.7 $18.7
Add: depreciation & amortization expense 15.9 16.4
Add: loss on impairment of long-lived
assets and (gain) loss on disposal of
assets 1.9 1.4
Add: stock compensation expense 2.4 2.1
----------------- --------------
Adjusted EBITDA $27.8 to 30.9 $38.6
================= ==============
Mothers Work press releases available through Company News On-Call at
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SOURCE Mothers Work, Inc.
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Related links:
http://www.motherswork.com
http://www.prnewswire.com/comp/581877.html /
CONTACT:
Edward M. Krell, Chief Operating Officer &
Chief Financial Officer of Mothers Work, Inc., +1-215-873-2220
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