This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fairway Group Holdings Corp. Reports Second Quarter Results

Adjusted EBITDA increased 4.7% to $10.6 million in the second quarter of fiscal 2014 from $10.1 million in the second quarter of fiscal 2013. The increase was primarily due to the contribution from new stores and an improvement in gross margin. Adjusted EBITDA was adversely affected by an increase in insurance costs of approximately $0.5 million and an increase in public company costs of approximately $0.4 million. The Adjusted EBITDA margin was 5.8% in the quarter compared to 6.3% in the same period of the prior year. The decrease in the Adjusted EBITDA margin was primarily due to higher operating expenses, as a percentage of sales, at the three new stores opened subsequent to July 1, 2012, which is typical for new locations during the first few quarters of operations, an increase in public company expenses, an increase in insurance expenses and the cycling of the opening period for both the Woodland Park, NJ store and the Westbury, Long Island store which had the benefit of above average volumes and margins during the second quarter of fiscal 2013. See the discussion under "Supplemental Non-GAAP Financial Disclosure" below for an explanation of Adjusted EBITDA.

The following table sets forth a reconciliation to Adjusted EBITDA from Net Loss:
EBITDA Reconciliation ($ in millions, % of net sales)
Quarter Ended: September 30, 2012 September 29, 2013
Net Loss  $ (7.8) (4.9%)  $ (12.2) (6.7%)
(+) Transaction expenses  2.8 1.7%  -  0.0%
(+) Transaction bonuses  1.0 0.6%  -  0.0%
(+) Management fees  0.7 0.4%  -  0.0%
(+) Non-recurring expenses   1.3 0.8%  1.4 0.8%
(+) Interest expense, net   5.8 3.6%  5.0 2.7%
(+) Income tax (benefit) expense   (5.9) (3.7%)  0.8 0.4%
(+) Store depreciation & amortization   4.5 2.8%  5.5 3.0%
(+) Corporate depreciation & amortization   1.1 0.7%  1.1 0.6%
(+) Equity compensation charge   0.0 0.0%  2.8 1.5%
(+) Store opening costs   5.5 3.4%  3.9 2.1%
(+) Production center start-up costs  -  0.0%  1.3 0.7%
(+) Pre-opening advertising  1.1 0.7%  1.0 0.6%
Adjusted EBITDA  $ 10.1 6.3%  $ 10.6 5.8%

Other Operating Items

Gross profit in the second quarter increased $7.5 million, or 14.4%, to $59.4 million from $51.9 million and the gross margin improved to 32.4% from 32.3% in the prior year. The increase in the gross margin was primarily due to an increase in the merchandise margin partially offset by higher occupancy costs, as a percentage of sales, at our new locations and an increase in rent at one of our existing locations due to the expansion of the leased space.

4 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,812.19 +19.51 0.11%
S&P 500 2,089.14 +2.55 0.12%
NASDAQ 5,102.8080 +0.33 0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs