In total, operating expenses for the second quarter of fiscal 2012 were $24.7 million, or 40.0% of net sales, as compared to $23.4 million, or 38.8% of net sales, in the second quarter of fiscal 2011. For the first six months of fiscal 2012, operating expenses were $48.9 million, or 41.6% of net sales, compared to $46.5 million, or 41.4% of net sales, in the first six months of fiscal 2011. The increase in operating expenses for the second quarter and first six months of fiscal 2012 were driven by increased marketing and e-commerce related expense. In addition, as compared to last year, professional fees increased primarily due to a $450,000 legal fee reimbursement that positively impacted last year’s second quarter.

At June 30, 2012, cash and marketable securities totaled $24.4 million, as compared to $27.3 million in cash and marketable securities at July 2, 2011. Total inventory at cost increased 21.3% at quarter end from the prior year period.

A table summarizing financial results follows:

Twenty-Six Weeks Ended
 

Thirteen Weeks Ended
June 30,   July 2, June 30,   July 2,

 

2012

2011

2012

2011

($ thousands, except for per share data, share numbers and store count)
 
Net sales $ 117,628 $ 112,365 $ 61,633 $ 60,266
Operating income (loss) (346 ) 2,899 1,677 4,159
Net income (loss) (177 ) 2,027 1,031 2,799
 
Basic earnings (loss) per share $ (0.01 ) $ 0.16 $ 0.08 $ 0.22
Diluted earnings (loss) per share $ (0.01 ) $ 0.16 $ 0.08 $ 0.22
 
Basic weighted average shares
outstanding 12,877,000 12,822,000 12,880,000 12,827,000
Diluted weighted average shares
outstanding 12,877,000 12,861,000 12,928,000 12,873,000
 
Number of stores open at end of period 264 280 264 280
 

Store Opening Plans

During the second quarter, the Company opened one store and closed five existing locations, ending the period with 264 stores in operation. For fiscal 2012, the Company expects to open no new additional stores and close one additional location, ending the year with approximately 263 locations and 532,000 square feet in operation.

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