Birks & Mayors Reports Full Year Fiscal 2011 Financial Results And First Quarter Fiscal 2012 Sales Results
Gross profit for fiscal 2011 was $116.1 million, or 42.8% of net sales, as compared to $104.5 million, or 41.0% of net sales, in fiscal 2010. The 180 basis point increase in gross profit margin was primarily attributable to reduced promotional pricing associated with the improving economic environment in both the U.S. and Canada.
Selling, general and administrative expenses for fiscal 2011 were $107.2 million, or 39.6% of net sales, as compared to $106.3 million, or 41.7% of net sales, in fiscal 2010. The $0.9 million increase was primarily driven by $3.8 million of higher expenses related to foreign currency translation and $1.1 million of lease termination costs related to early lease termination fees for three underperforming stores closed at the beginning of fiscal 2012 partially offset by a $1.9 million reduction in marketing expenses, $1.4 million of lower general operating expenses resulting from our continued efforts to reduce general corporate overhead costs and $0.7 million of lower compensation expenses. Excluding the impact of foreign currency translation and the lease termination costs, expenses were $4.0 million lower than the prior year.
Inventory totaled $141.8 million at March 26, 2011, as compared to $143.8 million at March 27, 2010, a decrease of $2.0 million, or 1.4%. Excluding the impact of $3.5 million of foreign currency translation, the Company’s inventory decreased by $5.5 million compared to prior year end. The decrease was primarily driven by a 6% decrease in comparable store inventory.
The Company generated $10.3 million of operating cash flow in fiscal 2011, which far exceeded the Company’s goals for the year.Bank indebtedness (which represents amounts borrowed on the Company’s senior secured revolving credit facility) totaled $61.9 million for fiscal 2011, as compared to $64.5 for fiscal 2010, a decrease of $2.6 million. Excluding the impact of $0.9 million of foreign currency translation, bank indebtedness is lower than the prior year end by $3.5 million. The decrease in bank indebtedness is a result of the Company utilizing cash flow from operations to de-leverage the Company by lowering the level of funding under the Company’s senior secured revolving credit facility. The Company’s excess borrowing capacity was $20.5 million as of March 26, 2011 compared to $17.9 million at the end of the prior fiscal year.
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