PHILADELPHIA, Nov. 18 /PRNewswire-FirstCall/ -- Mothers Work, Inc.
(Nasdaq: MWRK), the world's leading maternity apparel retailer, today
announced operating results for the fourth quarter and full year fiscal 2008
ended September 30, 2008, and provided financial guidance for fiscal 2009
reflecting improved earnings versus fiscal 2008 and a projected generation of
cash available for potential debt repayments of approximately $20 million in
fiscal 2009. The Company also announced that it intended to prepay $10
million of its Term Loan prior to the end of the first quarter of fiscal 2009
(December 31, 2008), as part of the Company's priority to continue to
deleverage its balance sheet.
Full Year Fiscal 2008 Financial Results
-- Net sales for the fiscal year ended September 30, 2008 (fiscal 2008)
decreased 2.9% to $564.6 million from $581.4 million for the preceding year.
The decrease in sales versus last year resulted primarily from a decrease in
sales from the Company's leased department and licensed relationships, largely
due to the termination of our Sears(R) leased department relationship in June
2008, as well as reduced sales volume from the ongoing closure of certain
underperforming stores, partially offset by increased internet sales and a
slight increase in comparable store sales.
-- Comparable store sales increased 0.2% during fiscal 2008 (based on 820
locations) versus a comparable store sales decrease of 4.8% during fiscal 2007
(based on 1,330 locations).
-- Net loss for fiscal 2008 was $(1.4) million, or $(0.23) per common
share (diluted), compared to net loss for fiscal 2007 of $(0.4) million, or
$(0.07) per common share (diluted).
-- Net loss for fiscal 2008 included restructuring and other charges of
$(2.2) million after tax and loss on extinguishment of debt of $(0.1) million
after tax. Net loss for fiscal 2007 included loss on extinguishment of debt
of $(5.7) million after tax.
-- Net income before loss on extinguishment of debt and restructuring and
other charges for fiscal 2008 was $0.8 million, or $0.14 per common share
(diluted), compared to net income before loss on extinguishment of debt for
fiscal 2007 of $5.4 million, or $0.87 per common share (diluted), which did
not include any restructuring or other charges.
-- Adjusted EBITDA was $25.5 million for fiscal 2008, compared to $38.6
million of Adjusted EBITDA for fiscal 2007. Adjusted EBITDA is defined in the
financial tables at the end of this press release.
-- Adjusted EBITDA before restructuring and other charges was $28.7
million for fiscal 2008 compared to $38.6 million of Adjusted EBITDA for
fiscal 2007, which had no restructuring and other charges. Restructuring and
other charges for fiscal 2008 include approximately $2.5 million related to
the retirement of the Company's former-CEO and $0.7 million related to the
Company's July 1, 2008 strategic restructuring.
Fourth Quarter Fiscal 2008 Financial Results
-- Net sales for the fourth quarter of fiscal 2008 decreased 3.9% to
$130.5 million from $135.8 million for the fourth quarter of fiscal 2007 and
were at the low end of the Company's guidance range of $130.5-$134.4 million
provided in its July 29, 2008 press release. The decrease in sales versus
last year resulted primarily from a decrease in sales from the Company's
leased department and licensed relationships, largely due to the termination
of our Sears leased department relationship in June 2008, partially offset by
an increase in comparable store sales.
-- Comparable store sales increased 2.8% during the fourth quarter of
fiscal 2008 (based on 960 locations) versus a comparable store sales decrease
of 6.8% during the fourth quarter of fiscal 2007 (based on 1,365 locations).
-- Net loss for the fourth quarter of fiscal 2008 was $(4.8) million, or
$(0.80) per common share (diluted), compared to net loss for the fourth
quarter of fiscal 2007 of $(5.4) million, or $(0.92) per common share
(diluted). This fourth quarter fiscal 2008 earnings performance was
consistent with the Company's revised guidance, provided in its October 8,
2008 press release, of diluted earnings per share of a loss between $(0.77)
and $(0.83) per share.
-- Net loss for the fourth quarter of fiscal 2008 included restructuring
and other charges of $(2.2) million after tax.
-- Net loss before restructuring and other charges for the fourth quarter
of fiscal 2008 was $(2.6) million, or $(0.44) per common share (diluted), a
significant improvement from the net loss for the fourth quarter of fiscal
2007 of $(5.4) million, or $(0.92) per common share (diluted), which did not
include any restructuring and other charges. This fourth quarter fiscal 2008
adjusted earnings performance was consistent with the Company's revised
guidance, provided in its October 8, 2008 press release, of adjusted diluted
earnings per share of a loss between $(0.42) and $(0.48) per share.
-- Adjusted EBITDA was a loss of $(1.6) million for the fourth quarter of
fiscal 2008 compared to a loss of $(1.0) million of Adjusted EBITDA for the
fourth quarter of fiscal 2007.
-- Adjusted EBITDA before restructuring and other charges was $1.6 million
for the fourth quarter of fiscal 2008, a significant increase from the loss of
$(1.0) million of Adjusted EBITDA for the fourth quarter of fiscal 2007, which
had no restructuring and other charges.
Retail Locations
The table below summarizes store opening and closing activity for the
fourth quarter and full year of fiscal 2007 and 2008, as well as the Company's
store and total retail location count at the end of each fiscal year.
Fourth Quarter Ended Year Ended
---------------------- ----------------------
9/30/2008 9/30/2007 9/30/2008 9/30/2007
---------------------- ----------------------
Store Openings
Total 4 2 28 18
Multi-Brand Store
Openings 2 - 7 9
Store Closings
Total 11 8 55 47
Closings Related to
Multi-Brand Store
Openings 3 1 19 20
Period Ending Retail
Location Count
Stores 754 781 754 781
Leased Department
Locations 278 795 278 795
----- ----- ----- -----
Total Retail Locations 1,032 1,576 1,032 1,576
===== ===== ===== =====
The decrease in leased department locations at the end of September 2008
versus the end of September 2007 predominantly reflects the closure of the
leased departments within Sears stores as compared to the 501 Sears leased
departments operated by the Company at the end of September 2007, pursuant to
mutual agreement with Sears. The Company's relationship with Sears ended in
June, 2008, resulting in the closure of the Company's leased departments
within Sears stores.
Commentary
Ed Krell, Chief Executive Officer of Mothers Work, noted, "Although we are
by no means satisfied with our earnings performance for the fiscal 2008 fourth
quarter or full year, we are pleased with our sales performance in recent
months given the extremely weak overall economic environment, and we believe
we are taking the right actions to manage our business in this tough
environment. Despite the worsening overall economic and retail environment of
the past few months, we have realized positive comparable store sales and
stronger comparable store sales than most retailers. Also, we have continued
to manage our inventory level and expenditures very tightly and, thus, we were
able to generate strong free cash flow in fiscal 2008 and we expect to
continue to do so in fiscal 2009. In fiscal 2008, we reduced our SG&A
expenses by $8.1 million, we reduced our inventory by $12.4 million, and we
reduced our total debt by $14.5 million.
Strong Financial Condition
Mr. Krell continued, "We continue to be in a strong financial position and
are very focused on continuing to generate free cash flow and continuing to
deleverage our balance sheet."
-- The Company has reduced its total debt by $14.5 million over the past
year and by $39.7 million over the past two years, bringing its total debt
down to $78.6 million at 9/30/08, compared to $93.2 million at 9/30/07, and
$118.3 million at 9/30/06.
-- With its significant debt reduction over the past two years, and the
very favorable refinancing of its Senior Notes in March 2007 with its lower-
cost Term Loan, the Company has significantly reduced its annual interest
expense over the past two years, from $14.5 million in fiscal 2006, to $7.0
million in fiscal 2008. The Company expects its interest expense for fiscal
2009 to continue to decline, to less than $5.5 million.
-- The Company has minimal maturities of long-term debt prior to the March
13, 2013 maturity of its Term Loan. As of 9/30/08, the Term Loan represents
$75.7 million of the Company's total debt of $78.6 million. The Company plans
to continue to make deleveraging its balance sheet a priority and, consistent
with this priority, the Company intends to prepay $10 million of its Term Loan
prior to the end of the first quarter of fiscal 2009 (December 31, 2008).
-- At September 30, 2008, the Company had no outstanding borrowings under
its credit facility and the Company had approximately $46 million of
availability under the credit facility. The Company's credit facility is
committed entirely by Bank of America and does not mature until March 13,
2012.
-- In July, 2008 the Company's Board of Directors approved a program to
repurchase up to $7 million of the Company's outstanding common stock. The
Company has not repurchased any stock under this program. Although the
Company may choose to repurchase its stock in the future, the Company's
priority remains continued deleveraging of its balance sheet through debt
repayment.
Looking Forward
"Looking forward, we feel very good about our product lines and the
actions we are taking to streamline our business and position us to improve
our profitability, both in the near term and the long term," Mr. Krell noted.
"With the very weak overall economic and retail environment we face, we will
continue to manage our inventory and expenditures very tightly. Also, we feel
strongly that the strategic restructuring and streamlining of our merchandise
brands and store nameplates that we announced on July 1, 2008, will help
improve our long-term profitability by simplifying our brand structure,
reducing our cost structure, and leveraging with the consumer both our
renowned A Pea in the Pod(R) luxury brand and our growing multi-brand
Destination Maternity(R) store brand.
"Our priorities for fiscal 2009 are as follows:
-- Implement our brand restructuring to better leverage our brands to
drive sales to our customers, and to simplify our operations and reduce our
cost structure.
-- Continue to drive improved merchandise assortments for our customers,
with lower SKU count and lower overall inventory level, providing a more
shoppable store environment for our customers.
-- Tightly control our expenses and capital expenditures and focus on
generating strong free cash flow, even in a difficult sales environment.
-- Continue to close underperforming stores.
-- Begin to build an international business outside of the U.S. and
Canada. In October 2008, we announced our planned expansion into six key
markets in the Middle East with our first international franchise agreement
with Multi Trend, a member of the Al Homaizi Group, to introduce our brands
into the Middle East. The first Mothers Work-branded retail locations in the
Middle East are expected to open during 2009, and we are actively working on
other potential international opportunities.
Guidance
"The increasingly weak overall economic environment makes it very
difficult to predict future performance. Although in recent months we have
seen positive comparable store sales and stronger sales than most retailers,
with the continued worsening of both the current economic environment and the
outlook for the economy, we are planning our sales more conservatively than we
did in July 2008, when we gave our initial financial guidance for fiscal 2009.
Accompanying this decrease in our sales plan for fiscal 2009, we have also
reduced our planned expenditures, both expense and capital, and our planned
inventory levels. Thus, we plan to generate significant free cash flow during
fiscal 2009 and plan to generate improved earnings compared to fiscal 2008.
"Our financial guidance for the full year fiscal 2009 is as follows:
-- Net sales in the $544 to $555 million range, representing a sales
decrease of between 1.7% and 3.6% versus fiscal 2008.
-- Comparable store sales change of between down 2.0% and flat. This
compares to our July 2008 guidance for fiscal 2009 comparable store sales of
between down 1% to up 1%.
-- Gross margin for fiscal 2009 expected to increase modestly versus
fiscal 2008.
-- Total operating expenses planned lower than fiscal 2008 and, even with
the planned lower level of sales, total operating expenses as a percentage of
net sales for fiscal 2009 planned to be slightly lower than fiscal 2008,
primarily resulting from the Company's strategic restructuring.
-- Operating income in the $7.9 to $11.9 million range, compared to fiscal
2008 operating income of $5.1 million.
-- Diluted earnings per common share, on a reported basis, of between
$0.20 and $0.60 per share for fiscal 2009, compared to a reported loss of
$(0.23) per share for fiscal 2008. This fiscal 2009 earnings per share
guidance is lower than the guidance of between $0.60 and $1.00 per share
provided in July 2008, as a result of: (1) the Company's lower sales and
earnings in the fourth quarter of fiscal 2008 compared to its expectations in
July, and (2) the reduction of the Company's comparable store sales outlook,
due to the continued worsening of the economy and the economic outlook since
July.
-- Adjusted diluted earnings per common share, before debt repurchase
charges and restructuring and other charges, are projected to be between $0.23
and $0.63 per share for fiscal 2009, compared to adjusted diluted earnings per
share of $0.14 per share for fiscal 2008.
-- Adjusted EBITDA in the $26.2 to $30.2 million range, compared to fiscal
2008 Adjusted EBITDA of $25.5 million.
-- Open approximately 14 to 18 new stores during the year, including
approximately 4 to 7 new multi-brand stores, and close approximately 45 to 55
stores, with approximately 8 to 12 of these planned store closings related to
openings of new multi-brand stores, including Destination Maternity
Superstores.
-- Capital expenditures planned at between $11 and $13 million, a
significant reduction from fiscal 2008 capital expenditures of $15.7 million,
and a reduction from the prior fiscal 2009 guidance of between $13 and $15
million. After deducting projected tenant construction allowance payments to
us from store landlords, the Company expects net cash outlay for capital
projects to be between $8 million and $9 million, compared to $13.1 million in
fiscal 2008.
-- Inventory at fiscal 2009 year end planned to be less than fiscal 2008
year end.
-- Given these assumptions, the Company plans to generate cash available
for potential debt repayments of approximately $20 million in fiscal 2009.
"Based on our sales results thus far in November, we expect our comparable
store sales for the full month of November to be in the range of flat to up
2%. We estimate that November comparable store sales will be favorably
impacted by approximately 2 to 3 percentage points due to the days adjustment
calendar shift, as November 2008 has one more Saturday and Sunday than
November 2007. In December, we will experience an unfavorable days adjustment
calendar shift, as December 2008 has one less Saturday and Sunday than
December 2007.
"Our financial guidance for the first quarter of fiscal 2009 is as
follows:
-- Net sales in the $136.5 to $138.5 million range.
-- Comparable store sales of flat to up 1.5% for the quarter.
-- Earnings per common share (diluted) of between a loss of $(0.10) and
$0.00 (breakeven) per share.
Company Strategy
Mr. Krell added, "As we plan our business for both fiscal 2009 and beyond,
we are guided by several key goals and strategic objectives:
1. Be a profitable global leader in the maternity apparel business,
treating all our partners and stakeholders with respect and fairness.
2. Increase the profitability of our U.S. business, focusing on the
following:
a. Increase comparable store sales, with continued improvement of
merchandise assortments and lower SKU count, providing a more
shoppable store environment for our customers. Capitalize on our
brand restructuring to better leverage our brands to drive sales to
our customers.
b. Control our expenditures and continue to be more efficient in
operating our business-streamline, simplify and focus.
c. Continue to expand our multi-brand Destination Maternity store chain
where ROI hurdles are met, with the goal of operating fewer but
larger stores over time.
d. Continue to close underperforming stores.
3. In addition to achieving increased comparable store sales, grow our
sales where we can do so profitably, including:
a. International expansion
b. Potential growth of our leased department and licensed relationships
c. Selective new store openings and relocations in U.S. and Canada
d. Continued growth in sales through the internet
e. Continued focus on enhancing our overall customer relationship,
including our marketing partnerships and futuretrust(R) college
savings program.
4. Focus on generating free cash flow to drive increased shareholder
value, and continue to deleverage our balance sheet.
5. Maintain and intensify our primary focus on delivering great maternity
apparel product and service in each of our brands and store formats, to serve
the maternity apparel customer like no one else can.
Mr. Krell concluded, "We look forward with a high level of commitment,
energy and focus to managing our business through these challenging economic
times, and driving near term improvements while also making progress towards
our longer term goals and strategic objectives so that we emerge as an even
stronger company when the economy recovers."
As announced previously, the Company will hold a conference call today at
9:00 a.m. Eastern Time, regarding the Company's fourth quarter and full year
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 Tuesday,
December 2, 2008 by calling (800) 324-4696.
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 September 30, 2008,
Mothers Work operates 1,032 maternity locations, including 754 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 net sales, comparable store sales, free
cash flow or other results of operations, liquidity and financial condition,
expense savings, potential debt prepayments, potential stock repurchases, 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 implement our merchandise
brand and retail nameplate restructuring, the success off our international
expansion, our ability to successfully manage and retain our leased department
and licensed relationships and marketing partnerships, future sales trends in
our existing store base, unusual weather patterns, changes in consumer
preferences and spending patterns, demographics and other macroeconomic
factors that may impact the level of spending for maternity apparel, overall
economic conditions and other factors affecting consumer confidence, the
impact of competition and fluctuations in the price, availability and quality
of raw materials and contracted products, 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, unusual weather patterns
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)
Fourth Quarter Ended Year Ended
----------------------- ----------------------
9/30/08 9/30/07 9/30/08 9/30/07
--------- -------- -------- --------
Net sales $130,497 $135,803 $564,602 $581,371
Cost of goods sold 67,306 69,819 281,561 281,155
--------- -------- -------- --------
Gross profit 63,191 65,984 283,041 300,216
Selling, general and
administrative
expenses 65,856 71,916 271,592 279,719
Store closing, asset
impairment and asset
disposal expenses 178 923 2,916 1,788
Restructuring and
other charges 3,461 - 3,461 -
--------- -------- -------- -------
Operating income
(loss) (6,304) (6,855) 5,072 18,709
Interest expense, net 1,539 1,883 6,974 9,848
Loss on extinguishment
of debt - - 97 9,423
--------- -------- -------- -------
Loss before income
taxes (7,843) (8,738) (1,999) (562)
Income tax benefit (3,059) (3,358) (610) (169)
--------- -------- -------- -------
Net loss $(4,784) $(5,380) $(1,389) $(393)
========= ======== ======== =======
Net loss per share -
basic and diluted $(0.80) $(0.92) $(0.23) $(0.07)
========= ======== ======== =======
Average shares
outstanding - basic
and diluted 5,953 5,842 5,924 5,802
========= ======== ======== =======
Supplemental
information:
Net loss, as reported $(4,784) $(5,380) $(1,389) $(393)
Add: loss on
extinguishment of
debt, net of tax - - 61 5,748
Add: restructuring
and other charges,
net of tax 2,171 - 2,171 -
--------- -------- -------- -------
Adjusted net income
(loss), before loss
on extinguishment of
debt and restructuring
and other charges (2,613) (5,380) 843 5,355
Add: stock compensation
expense, net of tax 314 346 1,430 1,282
--------- -------- -------- -------
Adjusted net income
(loss), before loss
on extinguishment of
debt, restructuring
and other charges,
and stock compensation
expense $(2,299) $(5,034) $2,273 $6,637
========= ======== ======== =======
Adjusted net income
(loss) per share -
diluted, before loss
on extinguishment of
debt and restructuring
and other charges(1)(2) $(0.44) $(0.92) $0.14 $0.87
======= ======= ======= =======
Adjusted net income
(loss) per share -
diluted, before loss
on extinguishment of
debt, restructuring
and other charges,
and stock compensation
expense(1)(2) $(0.39) $(0.86) $0.38 $1.08
======= ======= ======= =======
(1) Adjusted net income per share - diluted, before loss on extinguishment
of debt, restructuring and other charges, and stock compensation
expense for the year ended 9/30/08 is based on 6,048 average diluted
shares outstanding.
(2) Adjusted net income per share - diluted, before loss on extinguishment
of debt, restructuring and other charges, and stock compensation
expense for the year ended 9/30/07 is based on 6,135 average diluted
shares outstanding.
MOTHERS WORK, INC. AND SUBSIDIARIES
Selected Consolidated Balance Sheet Data
(in thousands)
(unaudited)
September 30, September 30,
2008 2007
------------ ------------
Cash and cash equivalents $12,148 $10,130
Inventories 88,056 100,485
Property, plant and equipment, net 66,098 68,651
Line of credit borrowings - -
Long-term debt 76,780 91,646
Stockholders' equity 89,468 88,523
MOTHERS WORK, INC. AND SUBSIDIARIES
Supplemental Financial Information
Reconciliation of Operating Income (Loss) to Adjusted EBITDA(1)
and Adjusted EBITDA Before Restructuring and Other Charges,
and Operating Income (Loss) Margin to Adjusted EBITDA Margin
and Adjusted EBITDA Margin Before Restructuring and Other Charges
(in thousands, except percentages)
(unaudited)
Fourth Quarter Ended Year Ended
----------------------- ---------------------
9/30/08 9/30/07 9/30/08 9/30/07
-------- -------- -------- --------
Operating income (loss) $(6,304) $(6,855) $5,072 $18,709
Add: depreciation &
amortization expense 4,096 4,542 15,974 16,410
Add: loss on impairment
of long-lived assets 288 832 1,628 1,781
Add: (gain) loss on
disposal of assets (149) (130) 546 (422)
Add: stock compensation
expense 501 567 2,281 2,101
-------- -------- -------- --------
Adjusted EBITDA(1) (1,568) (1,044) 25,501 38,579
Add: restructuring and
other charges(2) 3,216 - 3,216 -
-------- -------- -------- --------
Adjusted EBITDA before
restructuring and other
charges $1,648 $(1,044) $28,717 $38,579
======== ======== ======== ========
Net sales $130,497 $135,803 $564,602 $581,371
======== ======== ======== ========
Operating income (loss)
margin (operating
income (loss) as a
percentage of net sales) (4.8)% (5.1)% 0.9% 3.2%
Adjusted EBITDA margin
(Adjusted EBITDA as a
percentage of net sales) (1.2)% (0.8)% 4.5% 6.6%
Adjusted EBITDA margin
before restructuring
and other charges
(Adjusted EBITDA before
restructuring and other
charges as a percentage
of net sales) 1.3% (0.8)% 5.1% 6.6%
(1) Adjusted EBITDA represents operating income (loss) 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.
(2) Excludes accelerated depreciation expense of $245 included in
depreciation and amortization expense above.
Reconciliation of Net Income (Loss) Per Share - Diluted
to Adjusted Net Income Per Share - Diluted,
Before Loss on Extinguishment of Debt, Restructuring and Other Charges,
and Stock Compensation Expense
(unaudited)
Projected for the Actual for the
Year Ending Year Ended
9/30/09 9/30/08
----------------- --------------
Net income (loss) per share - diluted $0.20 to 0.60 $(0.23)
Add: per share effect of loss on
extinguishment of debt 0.02 0.01
Add: per share effect of restructuring
and other charges 0.01 0.36
----------------- --------------
Adjusted net income per share -
diluted, before loss on extinguishment
of debt and restructuring and other
charges 0.23 to 0.63 0.14
Add: per share effect of stock
compensation expense 0.21 0.24
----------------- --------------
Adjusted net income per share -
diluted, before loss on extinguishment
of debt, restructuring and other
charges, and stock compensation
expense $0.44 to 0.84 $0.38
================= ==============
Projected for the Actual for the
First Quarter First Quarter
Ending Ended
12/31/08 12/31/07
----------------- --------------
Net loss per share - diluted $(0.10) to 0.00 $(0.06)
Add: per share effect of loss on
extinguishment of debt 0.01 -
Add: per share effect of restructuring
and other charges 0.01 -
----------------- --------------
Adjusted net loss per share - diluted,
before loss on extinguishment of debt
and restructuring and other charges (0.08) to 0.02 (0.06)
Add: per share effect of stock
compensation expense 0.06 0.06
----------------- --------------
Adjusted net income per share - diluted,
before loss on extinguishment of debt,
restructuring and other charges, and
stock compensation expense $(0.02) to 0.08 $0.00
================= ==============
Reconciliation of Operating Income to Adjusted EBITDA
and Adjusted EBITDA Before Restructuring and Other Charges
(in millions, unaudited)
Projected for the Actual for the
Year Ending Year Ended
9/30/09 9/30/08(1)
----------------- --------------
Operating income $7.9 to 11.9 $5.1
Add: depreciation & amortization expense 15.2 16.0
Add: loss on impairment of long-lived
assets and (gain) loss on disposal of
assets 1.0 2.2
Add: stock compensation expense 2.1 2.3
----------------- --------------
Adjusted EBITDA 26.2 to 30.2 25.5
Add: restructuring and other charges(2) - 3.2
----------------- --------------
Adjusted EBITDA before restructuring
and other charges $26.2 to 30.2 $28.7
================= ==============
(1) Components do not add to total due to rounding.
(2) Excludes the portion of restructuring charges representing accelerated
depreciation expense, which is included in depreciation and
amortization expense above.
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