Operating and administrative expenses for the second quarter of 2012 increased to $224.0 million, from $216.9 in the same period last year. Operating and administrative expenses as a percentage of net sales increased to 22.5% in the second quarter of 2012, from 22.1% in the same period last year, due to increased occupancy costs related to new and replacement stores, incremental costs related to being a public company and reduced fixed cost leverage in the Company’s core business resulting from lower same store sales.
For the second quarter of 2012, net income was $18.9 million, or $0.42 diluted earnings per common share, compared to $17.7 million, or $0.58 diluted earnings per common share, for the second quarter of 2011.
Adjusted EBITDA for the quarter ended June 30, 2012 was $60.3 million, compared to $65.2 million in the second quarter of 2011. The decrease was primarily due to the effect of a more challenging economic and competitive environment, which resulted in lower same-store sales and reduced fixed cost leverage, as well as lower gross margins.
The Company did not open any new stores during the second quarter of 2012 but expects to open three new stores and relocate one store during the second half of 2012.Net cash provided by operating activities for the second quarter 2012 was $39.7 million, compared to $74.5 million during the second quarter 2011. The decrease in cash from operating activities was due primarily to the higher use of cash for working capital in 2012 which was primarily due to the timing of payments for inventory and accounts payable. The Company paid a dividend of $0.23 per share on all outstanding shares of its common stock during the second quarter. The Company currently intends to declare its next dividend of $0.23 per share at its board of directors’ meeting in mid-August.
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