Earnings Call Excerpt
Books-A-Million, Inc. (BAMM)
F1Q09 Earnings Call
May 22, 2008 5:00 pm ET
Executives
Douglas G. Markham – Chief Financial Officer
Sandra B. Cochran – Chief Executive Officer
Terrance G. Finley – President, Merchandizing Group
Presentation
Operator
Welcome to the Books-A-Million quarterly conference call. (Operator Instructions) At this time I would like to turn the conference over to Mr. Douglas Markham, Chief Financial Officer of Books-A-Million.
Douglas G. Markham
With me today is Sandy Cochran, President and Chief Executive Officer of Books-A-Million, and Terry Finley, President of our Merchandizing Group. We’re pleased to host this conference call regarding the company’s first quarter fiscal 2009 results which were issued this afternoon.
Before we begin, I would like to remind everyone that management’s comments in this conference call which are not based on historical facts are forward-looking statements. It should be noted that the company’s future results may differ materially from those anticipated and discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those described in periodic reports filed with the SEC.
I would like to begin this afternoon with a discussion of our financial performance for the first quarter and then I’ll turn the call over to Terry for a discussion of current business trends.
Net sales for the 13-week period decreased 0.7% to $115.5 million from sales of $116.3 million in the year earlier period. Comparable store sales for the quarter decreased 3.4% when compared to the 13-week period for the prior year. At quarter end we were operating 207 total stores.
During the quarter we opened one new superstore and closed two Booklands. Gross margin as a percent of sales was 29.3% compared to 29.0% last year. The increase as a percent of sales was partially due to lower discounts and markdowns versus last year.
Operating expenses as a percent of sales increased to 24.6% for the quarter from 23.2% in fiscal 2008. The increase as a percent of tax is primarily due to a one-time charge of $406,000 ($241,000 net of taxes) for severance related to staff reduction at the company’s headquarters. Depreciation expense increased $114,000 to $3.5 million from $3.3 million.
Interest expense increased $609,000 to an expense of $492,000 for the quarter versus an income of $117,000 in the prior year quarter due to higher average debt balances as a result of our special dividend and share repurchase program in fiscal 2008. Our effective tax rate for the quarter was 40.6% versus 40.9% in the prior year. Net income for the quarter was $0.9 million or $0.6 per diluted share compared to net income of $2.1 million or $0.13 per diluted share in the first quarter of fiscal 2008.
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