Gross profit as a percentage of revenue during the second quarter of fiscal 2013 decreased by 140 basis points to 54.3% compared with 55.7% during the second quarter last year. Gross profit margin during the first half of fiscal 2013 decreased by 170 basis points to 53.3% compared with 55.0% during the first six months of last year.
Selling, general and administrative expenses during the second quarter of fiscal 2013 increased by $3.0 million to $24.4 million, compared with $21.4 million during the second quarter last year. Year-to-date selling, general and administrative expenses increased by $3.8 million to $40.8 million compared with $37.0 million during the first half of last year.
Net earnings during the second quarter of fiscal 2013 decreased by $0.1 million to $8.4 million ($1.86 per diluted share) compared with $8.5 million ($1.77 per diluted share) during the second quarter last year. For the year-to-date period, net earnings decreased by $0.8 million to $4.9 million ($1.06 per diluted share) compared with $5.7 million ($1.19 per diluted share) during the first six months of last year.
During the second quarter of fiscal 2013, Danier repurchased 787,401 subordinate voting shares under a "modified Dutch Auction" substantial issuer bid at a purchase price of $12.70 per share. The subordinate voting shares repurchased under the substantial issuer bid represented approximately 23.01% of the total issued and outstanding subordinate voting shares as of November 28, 2012 and, immediately following the purchase and cancellation of those shares, approximately 2,635,172 subordinate voting shares remained outstanding. For further details, see Note 10(d) to the accompanying unaudited interim consolidated financial statements of the Company.
Danier continues to maintain a strong balance sheet with cash of $30.8 million, working capital of $42.2 million and no long-term debt.
Non-IFRS Financial Measures
The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). In order to provide additional insight into the business, the Company has also provided certain non-IFRS data, including "EBITDA" and "comparable store sales", as defined below. Non-IFRS measures such as EBITDA and comparable store sales are not recognized measures for financial presentation under IFRS. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS.
(1) EBITDA is defined as net earnings before interest expense, interest income, income taxes, impairment loss on property and equipment and amortization. EBITDA is a financial metric used by management and some investors to compare companies on the basis of ongoing operating results before taxes, interest expense, interest income, impairment loss on property and equipment and amortization and its ability to incur and service debt. EBITDA is also used by management to measure performance against internal targets and prior period results. EBITDA is calculated as outlined in the following table: For the 13 Weeks Ended For the 26 Weeks Ended --------------------------- --------------------------- Dec 29, 2012 Dec 24, 2011 Dec 29, 2012 Dec 24, 2011 --------------------------- ---------------------------- ($000) ($000) ($000) ($000)Net earnings $ 8,404 $ 8,466 $ 4,946 $ 5,698Add (deduct) impact of the following: Income tax 3,153 3,299 1,833 2,206 Interest expense 13 11 31 33 Interest income (37) (19) (103) (57) Impairment loss on property and equipment 327 21 327 21 Amortization 867 864 1,679 1,784 --------------------------- ----------------------------EBITDA $ 12,727 $ 12,642 $ 8,713 $ 9,685 --------------------------- ---------------------------- --------------------------- ----------------------------(2) Comparable store sales are defined as sales generated by stores that have been open during the full current fiscal year as well as the full prior fiscal year. Comparable store sales is a key indicator used by the Company to measure performance against internal targets and prior period results and excludes sales fluctuations due to new stores, store closings and certain permanent store relocations. This measure is also commonly used by financial analysts and investors to compare Danier to other retailers.
