Professional Traders

[Charles Living]

Bernanke, Will He Say Anything?

Published: Friday, 24 Aug 2012
By: Patti Domm

Fed Chairman Ben Bernanke’s speech in Jackson Hole is long on anticipation but will probably come up short on news.

The Fed chairman speaks at 10 a.m. ET Friday at the St. Louis Fed’s annual symposium in Wyoming, and traders are hoping for some new insight into what the Federal Reserve is thinking, including whether and when the Fed might take further easing steps. However, economists and Fed watchers don’t expect Bernanke to say much new, as the Fed continues to weigh incoming economic data ahead of its Sept. 12 meeting.

“I don’t think Bernanke is going to be signaling what the Fed is going to do. lt’s too close and it’s too close a call for him to be signaling anything,” said Bruce Kasman, chief economist at JPMorgan.


There is a busy calendar of economic news in the week ahead, but the Bernanke speech trumps all else. The Fed beige book on the economy, second quarter GDP revisions and consumer confidence are among the reports expected. Retailers will release chain store sales Thursday, giving an early look at the back-to-school shopping season.

The Republican convention will also be underway, and Wall Street will be watching to see how well the week goes for GOP presidential candidate Mitt Romney, favored over President Obama by many in the markets but slightly behind Obama in the polls.

“What’s interesting is Romney really has two challenges. The first is, he can’t screw up. A major mistake during his convention will hurt his chances for winning,” said Daniel Clifton, head of policy research at Strategas. “And he’s really got to give people a reason to elect him.” Clifton mention the example of Bill Clinton, who used his convention as a way to convince voters the economy was an issue he was best equipped to deal with.

Traders in the energy markets will also be watching the progress of Isaac as the storm moves into the Gulf of Mexico, with oil and gas drilling rigs in its path.

Investors will also be sorting out the aftermath of the late Friday jury verdict, which gave Apple [AAPL 663.222 0.592 (+0.09%) ] a $1 billion victory over Samsung. Samsung was found to have infringed on Apple patents on phones and tablets. Apple’s stock gained more than 1.7 percent in after-hours trading, reaching a new high.

Fed Ahead

Bernanke’s speech follows weeks of speculation about whether the Fed will carry out another round of quantitative easing, or asset purchases. Risk assets got a temporary boost in the past week when the Fed’s minutes from its Aug. 1 meeting showed that members were predisposed to more easing, but that meeting was held before a series of economic reports came in better than expected. St. Louis Fed President James Bullard pointed that out in an interview on CNBC this week, and he also said the market’s expectations for more QE have been too high this summer.

“I don’t think he (Bernanke) says anything a whole lot different. He’s going to reiterate that there’s scope for more easing and he’s pretty much told us that asset purchases and changes in the rate guidance are on the path ahead of us. It’s just hard to figure out which comes first,” said Ward McCarthy, chief financial economist at Jefferies.

McCarthy said he sees a 70 percent chance the Fed extends its rate guidance at the September meeting. The Fed is expected to say it will keep interest rates very low into mid-2015, from its current end of 2014 time frame. As for QE, McCarthy sees a 30 percent chance it will be announced in September, but a 90 percent chance it is announced by the end of the year, with December the most likely time frame.

“They’ll have a better sense of what is going to be done to prevent an economic cataclysm,” said McCarthy. “If (Congress) they don’t extend the tax cuts, we will be in a recession in 2013. If they don’t extend the tax cuts the Fed will take very aggressive action,” he said.

The expiration of tax cuts is one part of the “fiscal cliff” that will hit the economy Jan. 1 if Congress doesn’t move to extend tax cuts or make budget decisions. Congress is not expected to take any action on taxes or the automatic spending cuts, agreed as part of the debt ceiling compromise, until after the election.

Some economists say the Fed may also want to keep its powder dry until it sees how events unfold in Europe next month. On Sept. 6, the European Central Bank meets, and the market is looking to see more detail on how Europe’s bailout funds will function. Additionally, a German court rules on the legality of the European Stability Mechanism, or ESM, on Sept. 12, the first day of the Fed’s two-day September meeting.

ECB President Mario Draghi participates in a panel at the Jackson Hole symposium on Saturday morning.

“We’re not building into our expectation that Jackson Hole is going to steal the thunder from the ECB meeting … or the Fed meeting,” said Kasman. Kasman said Bernanke would not front run the Fed meeting or speak for the committee, and Fed members will want to get a look at the August employment report and other data before making a decision on easing.

Kasman expects to see the Fed act on rates guidance in September. “We think the Fed will extend the guidance on rates to 2015, and we’re on the margin believing the Fed will do a limited QE — something in the range of $250 billion that extends into January,” said Kasman.

Quantitative easing encourages investors to move into riskier assets and has helped support the stock market. The Fed currently is conducting Operation Twist, a program under which it buys longer-dated Treasurys and sells an equal amount at the short end. Unlike QE, twist does not expand the Fed’s balance sheet.

Mesirow Financial chief economist Diane Swonk said she expects the Fed to move to asset purchases this fall, with mortgage-backed securities a likely target. But Bernanke won’t give much guidance on that Friday. “I think he’s going to play his cards close to the vest. If he really believes it, he’ll say it but they are in such a difficult position right now. They may have to coordinate with the ECB by Sept. 13,” she said. “There’s a lot of things that you could look at and say, it would make sense to go in September but only under certain conditions. It would not be a slam dunk.”

The market’s sensitivity to possible Fed action was seen Friday when a story in the Wall Street Journal during the trading day, quoted part of Bernanke’s written comment to Rep. Darrell Issa (R-Calif.). Bernanke made clear, as he has in the past, that the door is open for more QE if needed and that the Fed will weigh the costs against the benefits.

Bernanke also defended the Fed’s actions in the letter to Issa, while pointing out that politicians need to take fiscal actions. More of that may be heard in his speech Friday, and more criticism of the Fed may be heard from the Republican convention. Romney has said he does not see a need for more Fed easing, and that it will not grow the economy...

[PoemStone]

I slept in 2 hours. I got in the habit
decades ago of early then needing a nap.

The 'world for brains'
hasn't got a lead in your head quite yet.
And you are still your own person, in that sense.

Heck, for a year or two I got up 4 or 5 am (to write)
and would head for a coffee shoppe then come back
home to sleep a little.

The last time 5 years ago I rode a bicycle in the sleet
2 miles and back again. 03 degrees. And wrote
an award winning poem that went on 3 city busses for a year.

Now you can tell why 'poem' is in my alias.
The stone part comes from the tradition in Japan
of engraving or chisling haiku poems onto wild natural great stones.

I'm not japanese nor can I read-write it.
I'm an Indiana Hoosier back from 25 years of bachelorhood
coast to coast.

Whup Whup.

Stock picking is another way of being an individual!
The next big thing for the peoples....

[Charles Living]

Apple Wins $1 Billion as Jury Finds Samsung Violated Patents

Published: Friday, 24 Aug 2012
By: Reuters

Apple scored a sweeping legal victory over Samsung Electronics on Friday as a U.S. jury found the Korean company had copied critical features of the hugely popular iPhone and iPad and awarded the U.S. company $1.05 billion in damages.

As for the countersuit, the jury found Apple did not violate any of Samsung's wireless standards or feature patents...

[Charles Living]

Analyst Sees 75% Upside for Tech Turnaround Stock

Published: Thursday, 23 Aug 2012
By: Katie Little

Tech companies Hewlett-Packard, Cisco, Research in Motion and Nokia are all jockeying to achieve success as a turnaround story, but only a couple have the necessary ingredients, one analyst says.

Although HP’s [HPQ 17.58 -0.055 (-0.31%) ] mixed earnings report rubbed investors the wrong way, one analyst is holding out hope that CEO Meg Whitman can stabilize the company.

The key parts of a turnaround story are stabilizing the business and generating cash, said Shaw Wu, senior technology analyst at Sterne Agree.

Wu emphasized HP’s “very strong cash flow” of nearly $3 billion in its latest earnings report, much of which was used to pay down its net debt. In contrast, Wu said both RIM [RIMM 6.94 -0.125 (-1.77%) ] and Nokia [NOK 3.08 -0.12 (-3.75%) ] do not make money.

On Wednesday, the company delivered a net loss of $8.85 billion — its biggest ever — after a massive writedown of the value of its services business. HP’s full-year guidance also fell short of estimates.

In its first trading session following the report, the company's shares fell 8 percent on Thursday to close at $17.64. Despite the drop, Wu has a $31 price target, implying a 75-percent jump from Thursday's closing price, and a ‘buy’ rating on HP’s shares.

Wu said the ingredients for a successful turnaround include having an installed customer base and a growth plan and building a balance sheet.

“We think HP has the ingredients,” Wu said. “Also, Cisco [CSCO 19.20 0.075 (+0.39%) ] is another name that we also use that in reference to. We think these companies have the ingredients necessary for a turnaround. Now there are other companies like RIMM and Nokia that don’t have quite those things so we think there’s a big distinction.”

Instead, RIM and Nokia “face much more dire futures,” Wu said.

Still, HP will not find the turnaround road instantaneous. Instead, it will be more of a long-term one, another analyst predicts.

“There’s going to be bumps along the road,” said Brian White, a senior analyst at Topeka Capital Markets. “The macro is a risk. They have the biggest Europe exposure of any company that I cover at 36 percent of revenue.”

[Charles Living]

You're up early on a weekend, I guess the markets never take a day off for us lol.

[PoemStone]

Yes, my 1st info sheet was 6/19/12

I think MSG will climb more, this summer.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=76769618

[PoemStone]

Dividend Stock News & Updates
http://www.dividendinvestor.com/

[Charles Living]

Very nice call Mike! I remember you mentioning MSG recently :)

[PoemStone]

RAI. DC Circuit Affirms District Court: Court of Appeals rules in favor of R.J. Reynolds Tobacco Company and other manufacturers in graphic warnings lawsuit
http://finance.yahoo.com/news/dc-circuit-affirms-district-court-174400484.html

WINSTON-SALEM, N.C., Aug. 24, 2012 /PRNewswire/ -- Today the U.S. Court of Appeals for the D.C. Circuit held unconstitutional a regulation by the U.S. Food and Drug Administration (FDA) that would have forced cigarette makers to place nine graphic health warnings on all cigarette packaging and advertising.

Agreeing with arguments made by R.J. Reynolds Tobacco Company and four other tobacco manufacturers, the Court held that the proposed warnings violated the First Amendment because the "FDA has not provided a shred of evidence - much less the substantial evidence required by the APA - showing that the graphic warnings will 'directly advance' its interest in reducing the number of Americans who smoke."

"We are pleased that the Court of Appeals agreed with Reynolds that consumers can and should be fully informed about the risks of tobacco use in a manner consistent with the U.S. Constitution," says Martin L. Holton III, executive vice president and general counsel for R.J. Reynolds. "Reynolds is committed to providing tobacco consumers with accurate information about the various health risks associated with smoking."

The Court of Appeals noted that the Government can require companies to make "purely factual and uncontroversial" disclosures about the risks of their products in order to prevent consumer deception, but stated that the graphic warnings crossed into unconstitutional territory: "These inflammatory images and the provocatively-named hotline cannot rationally be viewed as pure attempts to convey information to consumers. They are unabashed attempts to evoke emotion (and perhaps embarrassment) and browbeat consumers into quitting."

The Court relied heavily on data included in FDA's regulation that showed the graphic warnings would have little to no effect in reducing tobacco use. In particular, FDA's analysis of the regulation estimated that the warnings would likely cause no statistically significant change in U.S. smoking rates.

[dDT]

Big Boards - Top Losers Fri Aug 24 - Source: finviz.com

[ 10%+ losers ]

CHH Choice Hotels International Inc. 31.55 -27.00%
SOL ReneSola Ltd. 1.51 -15.64%
ADSK Autodesk, Inc. 30.13 -15.63%
ALRN American Learning Corporation 1.08 -13.60%
AMCN AirMedia Group Inc. 1.60 -12.09%
PPHM Peregrine Pharmaceuticals Inc. 2.20 -10.93%

http://stockcharts.com/c-sc/sc?s=CHH&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=SOL&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=ADSK&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=ALRN&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=AMCN&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=PPHM&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

[dDT]

Big Boards - Top Gainers Fri Aug 24 - Source: finviz.com

Top 25 charts posted.

20%+ gainers

AMPE Ampio Pharmaceuticals, Inc. 3.38 20.71%

10%-20% gainers

DRWI DragonWave Inc. 2.68 19.64%
UBNT Ubiquiti Networks, Inc. 10.57 17.58%
CLNT Cleantech Solutions International, Inc. 3.12 15.56%
ARUN Aruba Networks, Inc. 19.36 14.42%
UEPS Net 1 Ueps Technologies Inc. 9.88 14.35%
SVNT Savient Pharmaceuticals, Inc. 1.22 11.93%
GERN Geron Corporation 2.30 11.11%
RITT RiT Technologies Ltd. 3.66 10.91%
SVU SUPERVALU Inc. 2.35 10.85%
APRI Apricus Biosciences, Inc. 2.98 10.78%
GSV Gold Standard Ventures Corp 1.60 10.34%
ONTY Oncothyreon Inc 4.82 10.30%
VOG Voyager Oil & Gas, Inc. 1.29 10.26%
OREX Orexigen Therapeutics, Inc. 4.37 10.08%
QUIK QuickLogic Corporation 2.30 10.05%

15%-10% gainers

FRO Frontline Ltd. 3.93 8.86%
MEET MeetMe, Inc. 2.49 8.26%
CROX Crocs, Inc. 17.65 8.22%
CPRX Catalyst Pharmaceutical Partners Inc. 1.86 8.14%
CPSI Computer Programs & Systems Inc. 50.59 8.12%
SGRP Spar Group Inc. 2.05 7.89%
BKH Black Hills Corporation 33.42 7.77%
NAVR Navarre Corp. 1.27 7.63%
THLD Threshold Pharmaceuticals Inc. 7.98 7.40%
WZE Wizzard Software Corporation 4.65 7.14%
YELP Yelp, Inc. 19.48 7.09%
MCRS MICROS Systems, Inc. 51.59 7.01%
MTE Mahanagar Telephone Nigam Ltd. 1.53 6.99%
SRPT Sarepta Therapeutics, Inc. 10.78 6.94%
CLDX Celldex Therapeutics, Inc. 5.11 6.90%
TCX Tucows Inc. 1.30 6.56%
POZN POZEN Inc. 6.72 6.50%
BV Bazaarvoice, Inc. 14.85 6.45%
MEMS MEMSIC, Inc. 1.65 6.45%
AMRN Amarin Corporation plc 12.99 6.30%
AMBO Ambow Education Holding Ltd. 3.40 6.25%
KNDI Kandi Technologies, Corp 4.31 6.16%
GFA Gafisa S.A. 3.98 6.13%
GLNG Golar LNG Ltd. 41.14 6.11%
EVC Entravision Communications Corporation 1.24 5.98%
WPI Watson Pharmaceuticals, Inc. 83.32 5.96%
QEP QEP Resources, Inc. 28.80 5.96%
FVE Five Star Quality Care Inc. 4.64 5.94%
VNET 21Vianet Group, Inc. 9.57 5.75%
PXLW Pixelworks, Inc. 3.20 5.61%
TNP Tsakos Energy Navigation Ltd. 5.72 5.54%
SGYP Synergy Pharmaceuticals, Inc. 4.64 5.45%
PRMW Primo Water Corporation 1.17 5.41%
GFIG GFI Group Inc. 2.93 5.40%
CHC China Hydroelectric Corporation 1.20 5.26%
SCLN SciClone Pharmaceuticals, Inc. 5.02 5.24%
SNMX Senomyx Inc. 1.83 5.17%
CLSN Celsion Corp. 4.68 5.17%
ALJ Alon USA Energy, Inc. 13.67 5.15%
ECYT Endocyte, Inc. 9.20 5.14%
ZN Zion Oil & Gas, Inc. 2.06 5.10%
SWHC Smith & Wesson Holding Corporation 8.05 5.09%
PACB Pacific Biosciences of California, Inc. 1.88 5.03%

http://stockcharts.com/c-sc/sc?s=AMPE&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=DRWI&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=UBNT&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=CLNT&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=ARUN&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=UEPS&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=SVNT&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=GERN&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=RITT&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=SVU&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=APRI&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=GSV&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=ONTY&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=VOG&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=OREX&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=QUIK&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=FRO&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=MEET&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=CROX&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=CPRX&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=CPSI&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=SGRP&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=BKH&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=NAVR&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

http://stockcharts.com/c-sc/sc?s=THLD&p=D&yr=0&mn=6&dy=0&i=p85310988516&a=270624201&r=1342041056464

[PoemStone]

Charles, very nice commentary. Will repost.

[PoemStone]

MSG. Madison Square Garden. up 4%. Info Sheet.



8/24/12
Fiscal 2012 revenue of $1.3 billion, an 8% increase compared to prior year
Fiscal 2012 AOCF of $283.2 million, a 36% increase compared to prior year
Fiscal 2012 operating income of $177.5 million, up 44% versus prior year
http://ih.advfn.com/p.php?pid=nmona&article=53936359

8/24/12
4th-Quarter Profit Soars on Sports Revenue
http://ih.advfn.com/p.php?pid=nmona&article=53939249
Madison Square Garden Co.'s (MSG) fiscal fourth-quarter earnings soared as its sport division hosted more games, in part due to the New York Knicks and Rangers making the playoffs and the timing of the 2012 basketball season.

The media and sports entertainment company also benefited from higher affiliate revenue in its entertainment business, suggesting a new programming deal struck with Time Warner Cable (TWC) in February is paying off.

Shares rose 7.6% to $43.28 as earnings surpassed expectations. The stock is up more than 51% this year.

Spun off from Cablevision Systems Corp. (CVC) in 2010, MSG has continued to post profits since going public, and is using excess cash to modernize its namesake arena in renovations dubbed "the transformation." The company also operates Radio City Music Hall and the Beacon Theatre, both in New York City.

Revenue at MSG's sports business jumped 74%, while its operating income rose to $16 million from a year-earlier loss of $5 million. In addition to more game-related revenue from the Knicks and Rangers playoff games, the delayed start of the National Basketball Association's 2012 season resulted in a higher number of games compared to the year-earlier period. The so-called transformation is also helping revenue.

Revenue at MSG Media, which includes MSG Networks, rose 20%, as operating profit increased 15%. This was the first, full fiscal quarter that MSG benefited from its new programming deal with Time Warner Cable, which it reached in the middle of the prior quarter in order to end of a seven-week blackout of MSG channels.
Meanwhile, the company's entertainment business saw revenue rise 41%, while its operating loss narrow to $8.7 million from $14.5 million a year earlier due. MSG attributed the loss in part to higher expenses.

For the quarter ended June 30, MSG reported a profit of $28.6 million, or 37 cents a share, up from $8.5 million, or 11 cents, a year earlier. Revenue rose 42% to $332.9 million.
Analysts surveyed by Thomson Reuters recently forecast earnings of 22 cents.



In June, the company paid $23.5 million to acquire the Forum, an aging arena near Los Angeles that once served as home to the Lakers and Kings and that MSG hopes to turn into a top-tier concert site.
http://ih.advfn.com/p.php?pid=nmona&article=53939249

MSG Media consists of the MSG Networks (MSG, MSG Plus, MSG HD and MSG Plus HD) regional sports networks and the Fuse Networks (Fuse and Fuse HD), a national television network dedicated to music. MSG Entertainment is one of the country’s leaders in live entertainment. MSG Entertainment creates, produces and/or presents a variety of live productions, including the Radio City Christmas Spectacular featuring the Radio City Rockettes. MSG Entertainment also presents or hosts other live entertainment events such as concerts, family shows and special events in MSG’s diverse collection of venues. These venues include Madison Square Garden, Radio City Music Hall, the Theater at Madison Square Garden, the Beacon Theatre, the Chicago Theatre and the Wang Theatre



HISTORY.

http://www.themadisonsquaregardencompany.com/our-company/history.html

Website. http://www.themadisonsquaregardencompany.com/
MSG Club. http://www.thegarden.com/tickets.html
iHub. No Mod. 16 posts. 3 follows.

7/12/12 LivingSocial & MadisonSquareGarden (MSG) to provide premium offers
http://www.otcmarkets.com/stock/MSG/news
7/13/12 Zacks #2 buy Enters Oversold Territory
http://ih.advfn.com/p.php?pid=nmona&article=53459223
6/26/12 Madison Square Garden Company Acquires Famed Forum Arena
http://ih.advfn.com/p.php?pid=nmona&article=52893051
5/7/12 Fox Business News
MSG CEO on the Arena’s $980M Makeover [video]
http://video.foxbusiness.com/v/1678909371001/msg-ceo-on-the-arenas-980m-makeover/?playlist_id=87247
5/4/12 10-Q/3
Third quarter revenue of $400.5 million, a 21% increase compared to prior year period
Third quarter AOCF of $80.2 million, a 46% increase compared to prior year period
Third quarter operating income of $53.3 million, up 75% versus prior year period
http://ih.advfn.com/p.php?pid=nmona&article=52285799

[PoemStone]

Hi dDT, sharing your watch('m) tickers.

[Charles Living]

Successful Trades: 16/18 = 89%

*Refer to the Intro/iBox for more information.

[Charles Living]

Fiscal Cliff? Why Markets Haven't Priced In Disaster—Yet

Published: Friday, 24 Aug 2012
By: Patti Domm

The stock market hasn’t priced in the end of the world this December, and it’s not pricing in the “fiscal cliff.”

That’s because most investors don’t believe either will happen. While economists say the fiscal cliff (Learn More) has already created a drag on the economy, the impact on the stock market is less certain, and the outcome is about as predictable as the behavior of Congress.

“Most people have a relatively benign view of the risks involving the fiscal cliff, and the idea that it’s going to be addressed in the lame duck session of Congress,” says Goldman Sachs U.S. equity strategist David Kostin. “Some people have that view, and that’s a pretty optimistic view. Experience might suggest that politicians are not in the mood to coming to resolutions necessarily.”

The Mayan calendar predicts an end to the world on Dec. 21, and the U.S. reaches the so-called fiscal cliff on Jan. 1. That's when Bush-era tax cuts expire and automatic spending cuts go into effect if Congress does not act to stop them.

The severe spending cuts, agreed as part of the debt ceiling (Learn More) compromise, slice across federal agencies but disproportionately bite into the defense budget.

Kostin, speaking on “Squawk on the Street” this week, said there’s justified concern that Congress might act much like it did during the debt ceiling debate last year. (Watch the video)

“You saw the experience last year. Ten days, market fell 10 percent around the whole issue of the debt ceiling and negotiations,” he said. (Read More: Goldman Says Dump Stocks Before Fiscal Cliff)

But other analysts say investors expect more from Congress this time and they doubt it will let $500 billion in tax increases and spending cuts barrel into an already weak economy.

“I think the consensus is we don’t hit the whole fiscal cliff, and in that respect it is priced in,” said Bill Stone, chief investment strategist with PNC Wealth Management. “I think you can find enough places where there is enough agreement, and once the election goes by, whoever is in charge can get it done. The danger is people are worrying that there’s a chance the market does get more nervous about it. This leaves all of us with a little shudder (after) last year’s debacle with the debt ceiling.”

The fate of the fiscal cliff is unlikely to be resolved in any way prior to the election.

“The fiscal cliff is something that will affect us in fewer than six months, could have a devastating impact. A lot of people believe cooler minds will prevail but the fiscal cliff could have a swifter and more devastating impact. You pretty much will have an idea as to whether this will happen right after the election,” said Sam Stovall, chief equity analyst with S&P Capital IQ.

There is as much speculation about the fiscal cliff as there is about the outcome of the election.

If President Obama were to be re-elected but the Republicans win a majority in the Senate, his post-election behavior might be very different than if Democrats remain in control. There is also a view it will be much easier for compromise to be reached on taxes than on spending cuts.

Mesirow Financial chief economist Diane Swonk said the impact on the economy may have already been felt in the second quarter, as companies slowed down investment and became more cautious.

“I’ve talked to several CEOs in the Midwest who just assume we’re going off the cliff regardless of who wins,” she said.

Stovall said there are scenarios where the uncertainty could remain into the new year, which would be negative for markets.

“Technically, you could say even if Romney were to get in, and both houses of Congress were to be Republican, they’re not going to be in charge until January of next year. The current make up of Congress could say we’re going to let you worry about that next year and we’re going to fall off the cliff anyway,” he said.

There’s been some speculation that if Republican presidential candidate Mitt Romney wins, he could push extension of the Bush tax cuts for everyone post Jan. 1, and make any changes retroactively. (Read More: How Much Will It Cost You If Bush Tax Cuts End? A Lot)

The Obama administration, meanwhile, is adamant about reinstating higher tax rates for wealthy Americans. If there is a compromise on taxes, and Bush tax cuts are extended before the end of the year, it would stop the biggest immediate hit to the economy. But that would leave the thorny budget issues for the new year.

"It's not going to save the stock market, but it could save the economy,” Stovall said.

“There’s one scenario people are talking about. The Republicans win, and they don’t want to compromise. There’s no way that’s going to happen,” said Daniel Clifton, head of policy research at Strategas. He said both parties will recognize the political gravity of not acting.

Another scenario may be that should the Republicans sweep, taking the White House and Senate, they could make clear to rating agencies that they have a mandate, but they need more time to make major changes.

The Congressional Budget Office this week warned that the U.S. could fall back into recession during the first half of 2013, if Congress fails to act on the tax increases and spending cuts.

The “fiscal cliff” would drive unemployment back up to 9.1 by the end of the year and economic progress would stop, it said. The CBO previously forecast that inaction by Congress would trigger a mild recession for the first half of 2013, but now it sees contraction of 2.9 percent in GDP.

“Our base case is we’re probably going to get a fiscal drag of 1 percent of GDP but that’s telling you not all the provisions are going to make it through,” said Clifton.

Clifton said interest in the cliff among investors is high but the uncertainty makes it difficult to invest around it.

“The election is going to have an outsized impact on what provisions do make it through or not. There’s a very high interest, but there’s very little interest to act on it. You have more immediate things. You have QE. You have Europe,” he said. “You’re not going to be able to fully handicap the fiscal cliff until you get through the election. If Obama wins, there’s a higher probability that Bush tax cuts are reinstated for upper income.”

Clifton said the stock market could also feel the impact if investors believe capital gains taxes will go up. There is already an increase of 3.8 percent increase for high income individuals, which goes into effect on capital gains and certain other type of income Jan. 1, as part of the new health care law. The Obama Administration would like the capital gains rate to rise to 20 percent from 15 percent.

“It’s a 63 percent increase in the capital gains tax rate. On a real financial equity market impact, you’re lowering the after-tax rate of return on equities and that means, all else being equal, the stock market goes lower,” he said. Clifton said when the capital gains tax rate was raised to 28 percent from 20 percent in the late 1980s, there was “a rush out the door.” In the last three months of 1986, investors realized capital gains at 8 percent of GDP, a number that is more normally 2 percent, he said.

Clifton does not anticipate knowing which way it will go until the beginning of December, and then Congress has three weeks to get it done.

“Once you get into the lame duck session, it gets very serious,” Clifton said. For instance, Congress will need to act or the Alternative Minimum Tax (AMT) (Learn More) will impact many millions more tax payers. Internal Revenue Service Oversight Board chairman Paul Cherecwich warned in an interview last week that if Congress misses the Dec. 31 deadline to extend expired tax provisions there will be a domino effect including delays in the start of the tax filing season and a delay in sending refund checks.

“They only act when the gun is at their head,” he said. If Obama wins, he may want to deal with the existing Congress on the debt ceiling extension, which comes back for a vote March 1. Because of that, he may fold on some of his opposition to tax extensions for the wealthy, Clifton said.

The toughest task for Congress will be making changes in the budget to stop the automatic, or “sequestered” cuts. “ “Defense is 20 percent of total federal spending. They are 50 percent of all the sequestered cuts,” Clifton said.

“Fifty percent of cuts are non-defense. They will hit the Department of Agriculture, the Department of Education, all across the government. We are going to have to fire federal employees. Nobody wants the sequester to go into effect.”

If Congress waits until after the election, it will have just several weeks to get the cuts done, but each party already has a framework. Odds of a resolution of the sequester before year end are about 55 percent, says Clifton. “It’s really a reflection of what Congress looks like,” he said.

[dDT]

YELP looking good C !

[Charles Living]

Nice list, added it.

I just sold my last position this morning, so I'm on the hunt for new tickers lol. Plenty of nice ones on yours :) It looks like YELP is making a reversal now

[dDT]

some i'm watching ...

Symbol %Change Last High Change

ARUN +15.43% 19.53 19.80 +2.61
UEPS +12.27% 9.70 9.92 +1.06
MNOV +9.52% 2.0699 2.09 +0.1799
SVU +9.43% 2.32 2.40 +0.20
SVNT +7.34% 1.17 1.20 +0.08
MSG +6.29% 42.78 44.75 +2.53
AMRN +4.81% 12.8072 12.96 +0.5872
MPAA +4.64% 4.74 4.89 +0.21
DATE +2.79% 4.605 4.63 +0.125
ENVI +2.36% 2.60 2.60 +0.06
STRI +2.08% 3.4401 3.46 +0.0701
GSV +2.07% 1.48 1.50 +0.03

[Charles Living]

HEB (+12%) Hemispherx Biopharma files complete response with the FDA regarding its Ampligen new drug application for Chronic Fatigue Syndrome -- The FDA has agreed to accept, for review, further analyses of data from Hemispherx's AMP-516 Phase (Briefing.com)

[Charles Living]

ARUN (+15.74%) Aruba shares rise on results, brokers raise price targets

(Reuters) - Shares of Aruba Network Inc (ARUN.O) looked set to open up 15 percent on Friday, after it reported a rise in quarterly revenue on solid demand for its wireless network equipment and a host of brokerages raised their price targets on the stock.

[Charles Living]

IDIX (-3%)

[Charles Living]

HMSY (-7.52%)

[Charles Living]

ATPG (-7.88%)

[Charles Living]

Wow, such a great bounce from the low today, congrats!

[Charles Living]

ADSK (-15.96%) Autodesk Tumbles On Reduced Sales Forecast And Job Cuts

By Ari Levy - Aug 24, 2012 6:42 AM PT

Autodesk Inc. (ADSK) shares plunged the most in more than three years after the software maker lowered its annual sales forecast and said it plans to cut jobs as it restructures to focus on cloud and mobile computing...

[dDT]

G/M Charles ... ADSK is a hot play today !

[Charles Living]

Stocks Open Lower Amid Renewed EU Fears

Published: Friday, 24 Aug 2012
By: JeeYeon Park

Stocks dipped slightly at the open Thursday as renewed jitters over Greece's future in the euro zone overshadowed a better-than-expected durable goods orders.

All three major averages are on track for their biggest weekly drop in 12 weeks...

[Charles Living]

Morning Dan! Market Pullback here, which means another buying opportunity? :)

[Charles Living]

AAPL Update: I said it looked like a good hold for 700+, and its headed in that direction! Especially with iPhone 5 set to hit stores on September 12.

[Charles Living]

Morning Mike!

[PoemStone]

ROSG. Rosetta Genomics Expands Management Team, Laboratory Capacities and Commercial Operations
http://ih.advfn.com/p.php?pid=nmona&article=53879232

website. http://www.rosettagenomics.com/

Corporate Overview. 2012
 Share Capital
– 8.2M ordinary shares outstanding
– 390K warrants (wt. avg. exercise price – approx. $29/share)
– 36K options (wt. avg. exercise price – approx. $81/share)
– No convertible securities outstanding
 Cash
– Funds from recent financings:
– $1.4 million Registered Direct (April 12, 2012); 540,000* shares at $2.55/share
– $2.2 million Registered Direct (May 16, 2012); 632,057 shares at $3.50/share
– $6.6 million Registered Direct (May 24, 2012); 570,755 shares at $11.50/share
17
– $27.5 million from underwritten offering (August 2012); 5.5M shares at $5.00/share
– Sufficient to fund operations for >24 months
 Burn Rate
– Quarterly operating expenses of approximately $1.5 million
– Revenues from mets2 expected to reduce burn rate over next several quarters
 Debt Retirement
– Company paid off its entire $1.75M senior secured debenture
– Zero debt on the balance sheet
http://www.rosettagenomics.com/admin/SiteImages/file/Rosetta%20Corporate%20Overview%20-%208%2017%2012.pdf

[PoemStone]

WPI. after-hours. Watson's Generic Lidoderm(R) Receives FDA Approval
http://finance.yahoo.com/news/watsons-generic-lidoderm-r-receives-200500627.html

PARSIPPANY, N.J., Aug. 23, 2012 /PRNewswire/ -- Watson Pharmaceuticals, Inc. (WPI) today announced that its subsidiary, Watson Laboratories, Inc., has received final approval from the United States Food and Drug Administration (FDA) on its Abbreviated New Drug Application (ANDA) for lidocaine topical patch 5%, the generic equivalent to Endo's Lidoderm®. Watson plans to launch the product in September of 2013 pursuant with its settlement agreement with Endo Pharmaceuticals Inc. and believes that under Hatch Waxman rules, it will be entitled to 180 days of marketing exclusivity.

On May 29, 2012, Watson announced it had entered into an agreement with Endo Pharmaceuticals Inc. and Teikoku Seiyaku Co., Ltd to settle all outstanding patent litigation related to Watson's generic version of Lidoderm®. The agreement allows Watson to launch its lidocaine topical patch 5% product on September 15, 2013.

For the twelve months ending June 30, 2012, Lidoderm® had total U.S. sales of approximately $1.2 billion according to IMS Health data.

[dDT]

G/M everyone !

[PoemStone]

dDT, your nine financial-results reposted x2.

[EYEBUYSTOX]

PPHM - This seeking alpha article is misleading:

As evidence I offer this snippet: "Naturally, we assume that the May 2012 announcement for the second-line NSCLC trial was again not based on independent central review, since if it was, Peregrine would have likely eagerly disclosed it in its May press release."

and from the most recent earnings call transcript, ironically from the same website that allowed this tool to post the article:

http://seekingalpha.com/article/724781-peregrine-pharmaceuticals-management-discusses-q4-2012-results-earnings-call-transcript?page=3

"First, treatment was randomly assigned; second, procedure and examination schedules were identical for patients in all 3 arms; third, the trial was blinded to all parties involved, whether they were patients who participated, investigators who administered treatment and follow-up, central radiology reviewers who evaluated scans or a company like ours who oversaw the entire trial. This "gold-standard design" is typically reserved for Phase III development, if even used. We however chose to conduct this rigorous design after discussion with the FDA with the goal of potentially including this trial as part of a registration package.

You know what they say about "assuming"...but then again I'm assuming the person(s) who wrote this are ignorant and/or have an agenda.

[PoemStone]

Pfizer and Mylan Team Up to Establish Exclusive Long-Term Strategic Collaboration to Drive Sustained Growth of Generics Business in Japan
Collaboration Builds Upon Pfizer's Already Strong Commercial Presence and Mylan's Strong Reputation for Global Quality, Manufacturing and Supply Chain Reliability
http://finance.yahoo.com/news/pfizer-mylan-team-establish-exclusive-210000740.html

Under the terms of the agreement, Pfizer's responsibilities primarily consist of the commercialization of the combined generics portfolio, managing a combined marketing and sales effort using its strong brand reputation and exceptional track record of bringing new products to the market. Mylan's responsibilities primarily consist of managing operations, including research and development and manufacturing, building upon the company's strong global reputation for development of difficult to formulate products, quality manufacturing, supply chain reliability and service excellence.

The collaboration between Pfizer and Mylan will include a portfolio of more than 350 marketed products across a broad range of therapeutic categories, as well as more than 125 additional products in development. Products included in the collaboration are expected to be sold under the strong Pfizer brand with joint labeling.

"We are pleased with the opportunity to collaborate with Mylan to meet the ever-growing demand for high-quality generics in Japan. We believe this collaboration will enable both companies to effectively build upon each other's core capabilities to help meet the needs of more patients and customers in Japan than ever before," said Albert Bourla, President and General Manager of Pfizer's Established Products Business Unit. "Over the past 59 years, Pfizer Japan has built trust with patients and customers, and developed a very strong Pfizer brand. We are committed to delivering high quality medicines and believe this agreement will help us accelerate our ability to achieve our vision: Transform the Japanese Healthcare Environment with Established Products by 2020."

[Charles Living]

KYAK (+11%) Kayak's Profits Rises as Revenue Jumps 36%

Published: Wednesday, 22 Aug 2012
By: Reuters

Kayak Software reported a higher quarterly profit as the travel search website gained from a 36 percent rise in revenue from online tour agencies.

Kayak's [KYAK 30.80 3.07 (+11.07%)] net income in the second quarter rose to $7.3 million, or 19 cents per share, from $3.8 million, or 10 cents per share, a year earlier.


Revenue rose to $76.9 million.

[Charles Living]

Incoming, Golden Cross event with the moving averages.

[Charles Living]

Wow, awesome job, thanks! I'll definitely have my fill with reading today lol :)

[Charles Living]

They're holding up well after-hours; we'll see how things pan out tomorrow.

*I have no position in the company.

[dDT]

Have fun reading guys ...

[dDT]

NKBP - China Nuokang Bio-Pharmaceutical Inc. Reports Second Quarter 2012 Financial Results

GlobeNewswirePress Release: China Nuokang Bio-Pharmaceutical Inc. – 53 minutes ago

2Q12 Revenue was RMB72.9 Million ($11.5 Million)

2Q12 Net Income was RMB10.5 Million ($1.7 Million)

2Q12 Non-GAAP Adjusted Net Income was RMB11.3 Million ($1.8 Million)

Live conference call to be held Thursday, August 23, 2012 at 8:00 am ET

BEIJING, Aug. 22, 2012 (GLOBE NEWSWIRE) -- China Nuokang Bio-Pharmaceutical Inc. (NKBP) ("Nuokang" or the "Company"), a leading China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced its unaudited financial results for the second quarter of 2012.

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "We are pleased to announce financial results for the second quarter of 2012 which demonstrate our continued progress with our corporate restructuring and profit making. Revenues from Baquting, our flagship product, rose sequentially by approximately 20% to RMB68.9 million from RMB57.5 million in the first quarter of 2012. Revenues through our sales agent channels remained strong while direct sales revenue, although less than the second quarter of 2011, improved from the first quarter of 2012. We are encouraged by these signs and continue to believe in the potential of our product portfolio."

Chairman Xue continued, "We remain focused on rebuilding and strengthening our business across various dimensions. For example, we continued regaining revenue levels with Baquting, whose quarter-over-quarter growth indicates that revenues generated by this product are approaching levels that were achieved prior to the restructuring. Moving beyond our core product offerings as part of a diversification strategy, we continued investing in clinical trials and market education for Kaitong and the Alpha Lipoic Acid Capsule ("ALA"). The Company is in the process of securing the required SFDA production permit for ALA. We likewise continued investing in R&D to support ongoing innovation. I am especially encouraged to see a sequential rise in net profit, which positively reflects on the progress the Company is making."

Second Quarter 2012 Financial Highlights

Revenue was RMB72.9 million ($11.5 million)1, compared to RMB79.5 million in the prior year period;
Baquting revenue was RMB68.9 million ($10.8 million), compared to RMB76.1 million in the prior year period;
Gross profit was RMB64.2 million ($10.1 million), compared to RMB70.9 million in the prior year period;
Gross margin was 88.1%, compared to 89.2% in the prior year period;
Operating income was RMB13.2 million ($2.1 million), compared to RMB21.0 million in the prior year period;
Net income was RMB10.5 million ($1.7 million), or RMB0.56 ($0.09) per diluted ADS2, compared to RMB14.1 million, or RMB0.72 per diluted ADS, in the prior year period; and
Non-GAAP adjusted net income was RMB11.3 million ($1.8 million), compared to RMB15.7 million in the prior year period.

Second Quarter 2012 Financial Performance

Revenue for the second quarter of 2012 was RMB72.9 million ($11.5 million), compared to RMB79.5 million in the second quarter of 2011. Revenue from Baquting decreased to RMB68.9 million ($10.8 million) from RMB76.1 million in the prior year period but increased sequentially from RMB57.5 million in the first quarter of 2012. This sequential growth reflects the gradual stabilization of the Company's sales team structure and the team's improving performance. Baquting revenue as a percentage of total revenue was 94.5% in the second quarter of 2012, compared to 94.2% in the second quarter of 2011. Revenue from other products was RMB4.0 million ($0.6 million), compared to RMB3.4 million in the prior year period.

Gross profit for the second quarter of 2012 was RMB64.2 million ($10.1 million), compared to RMB70.9 million in the second quarter of 2011. Gross margin for the second quarter of 2012 was 88.1%, in line with 89.2% in the second quarter of 2011.

Operating income for the second quarter of 2012 was RMB13.2 million ($2.1 million), compared to RMB21.0 million in the prior year period. Although representing a year-on-year decline, this marks the second consecutive quarter of a sequential increase in operating income, which continued to be driven by the Company's focus on strengthening its sales and marketing efforts for both Baquting and the Company's new products throughout the second quarter of 2012.

Research and development expenses for the second quarter of 2012 were RMB4.7 million ($0.7 million), compared to RMB3.3 million in the prior year period. Research and development expenses as a percentage of revenue was 6.5% for the second quarter of 2012, within the Company's expected range.

Selling, marketing and distribution expenses for the second quarter of 2012 were RMB31.8 million ($5.0 million), compared to RMB36.6 million in the prior year period. Selling, marketing and distribution expenses for the second quarter of 2012 primarily consisted of the Company's investment in sales and marketing for Baquting to preserve market share as well as the Company's continued investment in the commercialization of Kaitong and ALA. Selling, marketing and distribution expenses as a percentage of revenue for the second quarter of 2012 was 43.6%, compared to 46.1% in the second quarter of 2011.

General and administrative expenses were RMB14.5 million ($2.3 million) compared to RMB9.9 million in the prior year period. During the second quarter of 2012, expenses relating to the Company's going-private transaction were RMB3.4 million ($0.5 million).

Provision for income taxes was RMB3.8 million ($0.6 million), compared to RMB4.8 million in the prior year period, as a result of decreased income before tax.

Net income was RMB10.5 million ($1.7 million), or RMB0.56 ($0.09) per diluted ADS, compared to RMB14.1 million, or RMB0.72 per diluted ADS, in the prior year period.

Non-GAAP adjusted net income, excluding foreign exchange gains and losses, ESOP-related charges and the ASC 740 adjustment, were RMB11.3 million ($1.8 million), compared to RMB15.7 million in the prior year period.

For the second quarter of 2012, the Company had approximately 154.4 million weighted average diluted ordinary shares outstanding, or 19.3 million weighted average diluted ADSs.

As of June 30, 2012, the Company had cash and cash equivalents and other short-term investments of RMB236.1 million ($37.2 million), compared to RMB179.4 million as of December 31, 2011.

Six Months Ended June 30, 2012 Financial Performance

For the six months ended June 30, 2012, revenue decreased 7.5% to RMB133.2 million ($21.0 million) from RMB144.0 million for the six months ended June 30, 2011. During this same time period, gross profit decreased 8.5% to RMB116.4 million ($18.3 million) from RMB127.1 million and operating income decreased by 64.2% to RMB14.0 million ($2.2 million) from RMB39.0 million.

Net income decreased 55.3% to RMB11.2 million ($1.8 million), or RMB0.56 ($0.09) per diluted ADS from RMB25.0 million, or RMB1.27 per diluted ADS, for the six months ended June 30, 2011. Weighted average number of diluted ordinary shares outstanding was approximately 154.6 million for the six months of 2012, or 19.3 million ADSs.

Non-GAAP Measures

Adjusted net income is presented to better illustrate the Company's ongoing and core operational results. Adjusted net income is defined as net income excluding foreign exchange losses, ESOP related charges and ASC 740 adjustment. Adjusted net income may be calculated differently, and therefore Nuokang's adjusted net income may not be comparable to similarly titled measures of other companies. Adjusted net income is not a measure of financial performance under U.S. generally accepted accounting principles (GAAP), and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP. Items excluded from adjusted net income are significant and necessary components to the operations of the Company's business, and, therefore, adjusted net income should only be used as a supplemental measure of operating performance.

Read more ...

[dDT]

TLYS - Tilly’s, Inc. Announces Second Quarter Fiscal 2012 Results

Net Sales Increased 20.4%; Comp Store Sales Increased 5.1%
GAAP Net Loss of $1.2 million, Reflecting Expected One-Time Charges
Adjusted Net Income up 49% to $2.6 Million

Business WirePress Release: Tilly’s, Inc. – 51 minutes ago

IRVINE, Calif.--(BUSINESS WIRE)--

Tilly’s, Inc. (TLYS) today announced financial results for the second quarter of fiscal 2012 ended July 28, 2012.

For the thirteen weeks ended July 28, 2012:

Total net sales for the second quarter were $105.1 million, an increase of 20.4% compared to the second quarter in the prior year. Comparable store sales, which include e-commerce sales, increased 5.1%. E-commerce sales were $9.8 million, an increase of 22% compared to the second quarter in the prior year.
Gross profit increased 21.1% to $31.1 million. Gross margin was 29.6%, a 10 basis point increase over the second quarter of fiscal 2011.
Operating loss on a GAAP basis was $3.3 million, including a one-time, non-cash charge to SG&A expense of $7.6 million, before tax, to recognize life to date compensation expense for stock options which was triggered by the consummation of the Company’s initial public offering in the second quarter.
The annual tax rate for the second quarter was 33.6%. The quarter also included, as expected, a one-time net tax benefit of $1.0 million resulting from the Company’s conversion from an “S” Corporation to a “C” Corporation, the result of a $3.0 million deferred tax benefit and a nearly $2.0 million tax provision charge.
On a GAAP basis, net loss was $1.2 million, or $0.04 per share, based on a weighted average share count of 27.3 million shares, which includes the non-cash charge to SG&A and the one-time net tax provision benefit mentioned above. This compares to net income of $3.5 million or $0.17 per diluted share based upon 20.5 million weighted average diluted shares in the second quarter of fiscal 2011.
Adjusted net income for the quarter increased 49.3% to $2.6 million, or $0.09 per weighted average diluted share, compared to an adjusted net income of $1.7 million or $0.09 per weighted average diluted share in the second quarter of 2011. These results adjust GAAP net income for the one-time, non-cash compensation charge to SG&A, assume an expected long-term effective tax rate of 40% for both this year and last year periods, and add back a charge for on-going non-cash compensation expense for stock options of $0.6 million, before tax, to the second quarter of 2011, which equals the charge for on-going non-cash compensation expense in the second quarter of 2012.
At the conclusion of this press release is a reconciliation of GAAP to non-GAAP results.

Daniel Griesemer, President and Chief Executive Officer, commented, “Our second quarter results were ahead of plan and reflected our continued focus on achieving sustainable, long-term, quality growth. Solid comp store sales gains along with prudent fiscal and inventory management resulted in a 49% increase in adjusted net income during the quarter. The strong performance was broad based across geographies and real estate venues. We are particularly pleased that the new stores opened this year are performing well above our expectations, demonstrating the strength of the Tilly’s concept on a national basis. We believe our progress also continues to validate the relevance of the Tilly’s brand and our unique business model that focuses on offering relevant brands and styles to our customers, and we believe we are well positioned for continued success in the second half of 2012 and over the longer term.”

For the twenty-six weeks ended July 28, 2012:

Total net sales for the first two quarters were $201.6 million, an increase of 18.3% compared to the first two quarters of the prior year. Comparable store sales, which include e-commerce sales, increased 4.7%. E-commerce sales were $20.7 million, an increase of 26% compared to the first two quarters of the prior year.
Gross profit increased 18.6% to $61.6 million. Gross margin was 30.5%, similar to the prior year period.
Operating income on a GAAP basis was $2.7 million, including the non-cash compensation charge triggered by the Company’s consummation in the second quarter of its initial public offering.
On a GAAP basis, net income was $4.8 million, or $0.20 per diluted share, based on a weighted average diluted share count of 24.1 million shares, which included the one-time, non-cash compensation charge to SG&A as well as a one-time net tax provision benefit which totaled $3.0 million for the two quarters year to date. This compares to net income of $8.3 million or $0.41 per diluted share based upon 20.4 million weighted average diluted shares in the prior year period.
Adjusted net income increased 31.9% to $6.2 million, or $0.26 per weighted average diluted share, compared to an adjusted net income of $4.7 million or $0.23 per weighted average diluted share in the prior year period. These results adjust GAAP net income for the one-time, non-cash compensation charge to SG&A incurred in the second quarter of 2012, assume an expected long-term effective tax rate of 40% for both this year and last year periods, and add a charge for on-going non-cash compensation expense for stock options of $0.6 million, before tax, to the second quarter of 2011, which equals the charge for on-going non-cash compensation expense in the second quarter of 2012.
At the conclusion of this press release is a reconciliation of GAAP to non-GAAP results.

Balance Sheet and Liquidity

As of July 28, 2012, the company had $47.7 million of cash and marketable securities as compared to $25.1 million as of January 28, 2012 and $31.0 million as of July 30, 2011. The company ended the quarter with no long-term borrowings and no debt outstanding on its revolving credit facility.

Third Quarter 2012 Outlook

For the third quarter, comparable store sales growth is expected to be in the range of 4% to 5%, on top of an 8.5% comparable store sales increase in the third quarter of 2011. On a GAAP basis, and using the anticipated effective tax rate of 33.6%, GAAP net income for the third quarter is expected to be in the range of $8.8 million to $9.3 million, or $0.31 to $0.33 per diluted share, and assumes a diluted share count of 28.2 million shares, compared to 20.5 million diluted shares in the third quarter of last year.

On an adjusted basis, using an anticipated on-going effective tax rate of 40%, adjusted net income in the third quarter is expected to be in the range of $7.9 million to $8.4 million, or $0.28 to $0.30 per diluted share.

Fiscal Year 2012 Outlook

The Company has revised its earnings per diluted share outlook upward to reflect the better than expected results achieved in the second quarter of 2012. Additionally, for fiscal year 2012, the company’s retail calendar includes a fifty-third week compared to a fifty-two week year in fiscal year 2011.

The Company continues to expect comparable store sales growth in the range of 4% to 5% for fiscal 2012, on a 52-week vs. a 52-week basis. On a GAAP basis, and using an anticipated full year effective tax rate of 33.6%, net income for fiscal year 2012 is expected to be in the range of $0.90 to $0.96 per diluted share, and assumes a diluted share count of 26.1 million shares, compared to 20.5 million diluted shares for the full year 2011.

On an adjusted basis, excluding the one-time charge in recognition of life-to-date stock-based compensation and excluding the one-time tax benefit stemming from the S-corporation to C-corporation conversion recorded in the second quarter of 2012, adjusted net income, using a 40% adjusted on-going effective tax rate for the full year, is expected to be in the range of $0.88 to $0.94 per diluted share.

Read more ...

[dDT]

DLLR - DFC Global Corp. Announces Record Fiscal Year Results

Revenue Increased 34.7% to a Record $1.1 Billion and Diluted Operating Earnings Per Share Increased 35.8% to a Record $2.16 Per Share Exceeding the Company’s Guidance;

Adjusted EBITDA Increased 31.9% to a Record $303.7 Million;

Company Provides Earnings Guidance for Fiscal 2013
Business WirePress Release: DFC Global Corp. – 50 minutes ago

BERWYN, Pa.--(BUSINESS WIRE)--

DFC Global Corp. (DLLR), a leading international diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years, today announced its results for the fiscal year ended June 30, 2012.

Fiscal Year 2012 Financial Highlights

Total consolidated revenue grew to a record $1.1 billion for the fiscal year, an increase of $273.3 million, or 34.7%, compared to the twelve months ended June 30, 2011. On a constant currency basis, total consolidated revenue increased by $280.4 million, or 35.6%.
Total consumer lending revenue increased to $645.9 million for the fiscal year, representing an increase of $216.7 million, or 50.5%, compared to the prior year period. Revenue from internet-based loans grew to $259.5 million for the fiscal year compared to $86.8 million for the twelve months ended June 30, 2011.
Total revenue from pawn lending increased to $80.9 million for the twelve months ended June 30, 2012 compared to $48.0 million for the prior year period. Pawn lending represented 7.6% of total consolidated revenue for the twelve months ended June 30, 2012.
Consolidated adjusted EBITDA was a record $303.7 million for the twelve months ended June 30, 2012, representing an increase of $73.5 million, or 31.9%, compared to the prior fiscal year, while also increasing by $75.3 million, or 32.7%, on a constant currency basis during the same period.
Diluted operating earnings per share was a record $2.16 for fiscal year 2012 compared to $1.59 for the prior fiscal year period, representing an increase of 35.8%, and exceeding the Company’s guidance of between $2.08 and $2.11 per share.
The Company expanded its global store network to 1,399 stores with the opening of 114 de novo stores in fiscal year 2012.

Discussion on Currency Exchange Rates

The U.S. Dollar strengthened slightly in relation to the Canadian Dollar and British Pound Sterling during the fiscal year ended June 30, 2012, as compared to the prior fiscal year. Furthermore, during the fourth quarter of fiscal 2012 compared to the fourth quarter of the previous fiscal year, the average value of the Canadian Dollar decreased approximately 4%, and the average value of the British Pound Sterling decreased by about 3%, relative to the U.S. currency. Consequently, fluctuations in currency rates had an unfavorable effect on a net basis on year-over-year U.S. Dollar comparisons of the Company’s consolidated financial results. As a result, the Company is providing some country comparisons on a constant currency basis.

Fiscal 2012 Overview

Commenting on the fiscal year ended June 30, 2012, Jeff Weiss, Chairman and Chief Executive Officer, stated, “I am pleased to announce another year of record performance for our Company. Total consolidated revenue for the fiscal year increased by 34.7% to a record $1.1 billion, while total adjusted EBITDA increased by 31.9% to a record $303.7 million. This is despite recent foreign exchange headwinds in the form of a strengthening U.S. Dollar over the past several months. Furthermore, diluted operating earnings per share of $2.16 for fiscal 2012 exceeded the Company’s guidance range of $2.08 to $2.11 per share.”

Jeff Weiss continued, “Fiscal 2012 was another milestone year for the Company as we continued to set the stage for long-term diversified growth with the completion of a number of strategic acquisitions around the world. We also expanded our internet lending business into four additional countries, including Sweden, Finland, Poland and Canada. In July 2011, we announced the acquisition of Risicum, a leading provider of internet loans in Finland and headquartered in Helsinki. Risicum provides loans in Finland and Sweden through both internet and mobile phone technology, utilizing multiple brands to target specific customer demographics. More importantly, the acquisition of Risicum provides us with a technology and collections platform that we believe is scalable for growth and exportable to other countries in Europe. We have already leveraged the Risicum platform to launch an internet loan product in Poland, and we expect to further extend this model into additional countries in the near future.

“In March 2012, we announced the acquisition of Super Efectivo S.L. Super Efectivo, founded in 2006, operates a chain of stores predominantly in Madrid, which offer secured pawn lending on gold jewelry and gold buying services. The purchase of Super Efectivo provides an initial entry point into the Spanish market with an opportunity to significantly expand our presence in that country through additional store acquisitions supplemented with de novo store development. Since the acquisition, we have recently opened one new de novo store in Spain bringing our total store count in that country to nine stores. We anticipate opening an additional 20 new de novo stores in Spain in fiscal 2013, with the intention to expand our store base beyond the City of Madrid. In many European countries, pawn lending is a primary source of credit for a variety of socio-economic groups, and it is fairly typical for people to pawn their gold jewelry, diamonds, and watches multiple times over the years in order to supplement credit needs for a short period of time, and then to redeem the pawned items when this line of credit is no longer needed. Given a population of 47 million people and a deep-rooted pawn lending tradition, we envision that Spain could eventually represent a market of 500 stores for our business. Our development program in Spain is consistent with the historical development of our store-based platforms in Canada and the United Kingdom, which both also began as small store chain acquisitions.”

Jeff Weiss continued, “In fiscal 2012, we also continued to invest in our management team and technology infrastructure to support the future expansion of our global enterprise into new countries and product lines. We established a second headquarters in the United Kingdom, in London, responsible for the development and expansion of our pawn lending business throughout Europe. This group will manage the integration of all future pawn store acquisitions and de novo store development in Europe outside of the United Kingdom, and will provide management oversight and direction to these businesses post-acquisition.

“Additionally, we made significant investments in our global collections technology, including the implementation of our most advanced company-wide automated dialer system. The investments we are making in this area should enable better customer contact resulting in more efficient debt collections performance and an improved ability to mutually agree on a loan repayment schedule, if necessary. Furthermore, the new dialer system and inherent additional calling capacity should help us maintain stronger customer relationships through the automated pre-calling of customers, to remind them of the future due date of their loans.”

Jeff Weiss concluded, “Our near-term growth strategy is based on three principal components. First, we intend to continue opening de novo stores in our European business units, which have the least number of retail financial services stores in relation to the under-banked population as compared to the U.S. and Canada. Second, we look to further leverage our existing internet lending platforms into new countries, principally in Europe, in order to access the growing numbers of ALICE (Asset Limited, Income Constrained, Employed) customers in those markets. Third, we plan to continue acquiring small pawn lending chains in select European countries augmented by de novo stores, to strengthen our position as the leading pawn lender to the ALICE and ARTI (Asset Rich, Temporarily Illiquid) population in Europe. This diversification strategy should help insulate our business from unfavorable regulatory activities in any one jurisdiction, while providing a pathway for long-term shareholder value, as the new businesses we acquire and the new markets we enter are expected to provide the next generation of growth for our Company. In fiscal year 2012, approximately 40% of our total revenue was derived from new products and markets we developed or entered into over the past three years. This percentage should increase in future periods as we further develop these new markets and continue to execute against our future product and geographic diversification strategies.”

Fiscal 2012 Fourth Quarter Business Update

Total consolidated revenue in the United Kingdom increased by £17.3 million, or 26.1%, for the quarter compared to the three months ended June 30, 2011. Consumer lending revenue grew by £12.7 million, or 27.3%, for the three months ended June 30, 2012, compared to the fourth quarter of the prior fiscal year, reflecting additional revenue from the Company’s internet lending businesses, as well as continued strong performance and growth of its store-based business. Revenue from internet lending in the United Kingdom, which includes the MEM internet lending business that the Company acquired in April 2011, increased to £37.9 million for the quarter ended June 30, 2012, compared to £28.3 million for the prior year’s fiscal fourth quarter, representing growth of 33.9%. The U.K. pawn lending business contributed £6.1 million of total revenue for the quarter, representing growth of 6.5% over the prior year period. During the quarter, the Company opened 29 new stores in the United Kingdom, which amounts to 91 new store openings for fiscal year 2012 and 210 new stores opened over the past three fiscal years, which the Company expects will provide significant earnings contribution as these stores mature.

Total consolidated revenue in Canada increased by C$1.2 million, or 1.5%, over the prior year’s quarter. Total consumer lending revenue increased by C$2.3 million, or 5.3%, during the fiscal fourth quarter compared to the fourth quarter of the previous fiscal year. The newly developed internet lending channel in Canada generated C$1.7 million of total revenue for the quarter, which the Company anticipates will increase each successive quarter as it further expands this product into additional provinces in fiscal year 2013.

With respect to Scandinavia, the Sefina pawn lending business contributed SEK 61.2 million of total revenue for the three months ended June 30, 2012 compared to SEK 53.6 million for the fourth quarter of the prior fiscal year. Risicum, the internet and telephony based lending business operating in Sweden and Finland, which the Company acquired in July 2011, contributed €7.4 million of revenue during the quarter.

The consolidated loan loss provision, expressed as a percentage of gross consumer lending revenue, was 20.8% for the quarter ended June 30, 2012 compared to 20.6% for the three months ended March 31, 2012, and represents an aggregation of both store-based loans and a rapidly growing proportion of internet loans to new customers in the United Kingdom, Scandinavia, Canada and Poland. The Company’s internet lending businesses currently incur higher loan losses than its store-based businesses partly as a result of a faster growing base of new customers, which typically incur higher loan default rates. Looking to the future, and considering the anticipated continued greater growth of the Company’s global internet lending business relative to its store-based businesses, the Company expects the consolidated loan loss provision, expressed as a percentage of lending revenue, to continue to increase on a quarterly basis, but with overall profit margins for the internet lending business comparable to the existing store-based businesses. As a percentage of loan originations or principal lent, the consolidated loan loss provision for the quarter ended June 30, 2012 was 4.7%. As always, the Company is prepared to tighten or moderately loosen its lending criteria if the global economies deteriorate or expand, respectively, as it has successfully done in previous years.

Fiscal 2012 Fourth Quarter Financial Results

For the three months ended June 30, 2012, the Company incurred $25.7 million of net one-time non-cash charges principally related to a $27.7 million goodwill and intangible asset impairment charge associated with the Company’s Dealers’ Financial Services business unit, partially offset by a $4.6 million net unrealized non-cash mark-to-market valuation gain on the Company’s debt, and legacy cross-currency interest rate swap agreements that were subsequently paid off during the quarter. The Dealers’ Financial Services business unit, which provides fee-based services in the United States to enlisted military personnel applying for loans to purchase new and used vehicles, has been negatively impacted by a high-level of continuing troop deployments in foreign countries, as well as an influx of aggressive competition from a number of other sub-prime lenders. Including these net one-time non-cash charges, income before income taxes on a GAAP basis was $7.4 million for the quarter compared to income before income taxes of $28.7 million for the fourth quarter of the previous fiscal year, resulting in a reported net loss of $3.3 million for the quarter compared to net income of $17.5 million for the fourth quarter of the previous fiscal year. Likewise, the diluted loss per share on a GAAP basis was $0.08 for the fiscal 2012 fourth quarter, compared to diluted earnings per share of $0.39 for the fourth quarter of the previous fiscal year.

With respect to operating earnings for the fourth quarter, excluding the net non-recurring charges for the quarter, the non-cash interest expense resulting from the adoption of ASC 470-20, and the non-cash amortization associated with the legacy cross-currency interest rate swap agreements, adjusted income before income taxes increased 23.2% to $38.8 million for the quarter, compared to $31.5 million for the three months ended June 30, 2011. The intercompany allocation of the proceeds of the convertible notes issued in April 2012, combined with the changing geographic mix of the Company’s earnings towards Europe, have reduced the effective income tax rate from operations for fiscal 2012 to 33.0%. Therefore, considering a pro forma effective income tax rate from operations of 33.0%, which excludes the impact of the aforementioned non-recurring and non-cash charges, diluted operating earnings per share was $0.58 for the fiscal 2012 fourth quarter compared to $0.46 for the fourth quarter of the previous fiscal year, representing an increase of 26.1%. A table reconciling pro forma income before income taxes and diluted operating earnings per share to GAAP basis income before income taxes and GAAP basis diluted earnings per share is included on page 12 of this News Release.

Company Liquidity

As of June 30, 2012, the Company had drawn $22.0 million of its $235.0 million global revolving credit facility. Furthermore, as of June 30, 2012, the Company had drawn £5.3 million of its £6.0 million credit facility in the United Kingdom, and had drawn SEK 50.0 million and EUR 16.3 million of its total SEK 125.0 million and EUR 18.8 million credit facilities in Scandinavia, in order to fund the growth of the pawn pledge book in the U.K. and Scandinavia, respectively.

The Company’s long-term debt structure principally consists of a $230.0 million tranche of senior convertible notes due 2017, a $44.8 million tranche of senior convertible notes due 2027, and a $120.0 million tranche of senior convertible notes due 2028. The Company has a $600.0 million tranche of senior unsecured notes that are not due until December 2016. In addition, there is a SEK 240.0 million (~$34.7 million) term loan in Sweden due July 2016.

Fiscal Year 2013 Outlook

Looking forward to fiscal 2013, Randy Underwood, Executive Vice President and CFO stated, “We continue to be excited about the considerable growth opportunities ahead of us, from both our existing businesses and the new businesses we have recently acquired. We expect to enter new countries in Europe, and continue acquiring new businesses, investing in new stores, technologies and products, while enhancing the management infrastructure in both our core businesses and also our recently acquired businesses, in order to support future years’ growth. Additionally, as currency exchange rates continue to fluctuate on a daily basis due to the evolving world economies, which naturally affects the translation of our significant international financial results into U.S. Dollars per GAAP, we will initially be providing a relatively wide guidance range for fiscal 2013. This range should balance the significant growth opportunities that we believe exist in our global businesses with the unpredictable fluctuations in future currency exchange rates, which could be either net favorable or unfavorable over the coming fiscal year.

“For fiscal 2013, we are projecting operating diluted earnings per share, which excludes any one-time charges that may occur, the non-cash impact of ASC-470-20, and the non-cash amortization of the now retired legacy cross-currency interest rate swap agreements, of between $2.35 and $2.55 per diluted share. This guidance range reflects an expected effective income tax rate from operations of 32.0%. The anticipated reduction in the effective income tax rate from operations in fiscal 2013 reflects a greater mix of earnings outside the U.S. at lower statutory tax rates, in addition to the combined favorable effect of the convertible notes issued in April 2012 and the subsequent intercompany allocation of the net proceeds.”

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[dDT]

CO - China Cord Blood Corporation Reports Financial Results for the First Quarter of Fiscal 2013

1Q13 New Subscribers Up 28.3% to 16,460
1Q13 Revenue Up 31.9% YOY to RMB115.3 Million
1Q13 Operating Income Up 44.4% to RMB44.4 Million
Conference Call to be Held August 23, 2012 at 8:00 a.m. ET
PR NewswirePress Release: China Cord Blood Corporation – 46 minutes ago

HONG KONG, Aug. 22, 2012 /PRNewswire-Asia-FirstCall/ -- China Cord Blood Corporation (CO) ("CCBC" or the "Company"), China's leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services, today announced its preliminary unaudited financial results for the first quarter of fiscal year 2013, which ended June 30, 2012.

First Quarter of Fiscal 2013 Highlights

Revenues for the first quarter of fiscal 2013 increased by 31.9% to RMB115.3 million ($18.2 million) from RMB87.5 million in the prior year period.
New subscriber sign-ups and accumulated subscriber base were 16,460 and 256,214, respectively.
Gross profit increased by 34.5% to RMB90.9 million ($14.3 million) from RMB67.6 million in the prior year period.
Operating income jumped by 44.4% to RMB44.4 million ($7.0 million) from RMB30.8 million in the prior year period. Operating margin expanded by 3.3 percentage points to 38.5%, as core operations benefited from economies of scale.
Interest expense increased to RMB10.2 million ($1.6 million) from RMB0.5 million as a result of the convertible note issued to KKR China Healthcare Investment Limited ("KKR") in April 2012.
In the absence of the dividend income from our investment in Shandong Cord Blood Bank and discrete tax benefit of our Guangdong subsidiary, both of which took place in the first quarter of fiscal 2012, together with the first-time interest expense in relation to the convertible note that was issued in April 2012, net income attributable to shareholders decreased by 22.3% to RMB31.1 million ($4.9 million) from RMB40.0 million in the prior year period.
Operating cash flow for the quarter amounted to RMB136.9 million ($21.5 million).

"I'm pleased to announce that new subscriber numbers have, once again, set a new record by breaking the 16,000 mark to 16,460 for the first quarter of fiscal 2013, setting the stage for yet another astonishing year," stated Ms. Ting Zheng, Chairperson and Chief Executive Officer of China Cord Blood Corporation. "Not only are we setting new records based on revenues and operating income, but we are also gaining higher cash flows generated from increasing numbers of subscribers who chose to pay full-term storage fees upfront. Benefiting from the current "Dragon Year" baby boom, we are extremely excited about the results in this fiscal year."

Ms. Zheng further commented, "As we remain committed to increasing long-term shareholder value, the management team and I are encouraged to have had the Board of Directors authorize an increase in our annual share repurchase program from $15 million to $20 million, effective August 1, 2012. Upsizing the share repurchase program reflects not only our confidence in the underlying business, but also our long-term commitment to reward our shareholders. During the first quarter of fiscal 2013, the Company repurchased approximately 1.7 million ordinary shares and these shares were held by the Company as treasury stock."

First Quarter Fiscal 2013 Financial Results

REVENUES. Revenues jumped 31.9% to RMB115.3 million ($18.2 million) in the first quarter of fiscal 2013 from RMB87.5 million in the prior year period, driven mainly by the expansion in new subscriber numbers and, to a less extent, ongoing increases in the accumulated subscriber base.

Revenues generated from storage fees increased to RMB28.4 million ($4.5 million), up 25.7% from RMB22.6 million in the prior year period. This was driven by persistent growth in accumulated subscribers, which increased by 29.0% year-over-year to 256,214. Revenue from storage fees accounted for 24.6% of total revenues, compared to 25.8% in the prior year period.

Revenues generated from processing fees were RMB86.9 million ($13.7 million), up 33.9% from RMB64.9 million in the prior year period, reflecting 16,460 new subscriber sign-ups this quarter, a 28.3% annual increase and a 14.8% sequential increase in new subscriber sign-ups.

GROSS PROFIT. Gross profit for the first quarter of fiscal 2013 increased by 34.5% to RMB90.9 million ($14.3 million) from RMB67.6 million in the prior year period. Gross margin improved to 78.9%, reflecting benefits brought about by increasing economies of scale.

OPERATING INCOME. Operating income for the first quarter increased to RMB44.4 million ($7.0 million) compared to RMB30.8 million in the prior year period, as the effects of revenue growth and prudent cost controls continued to surpass the increases in combined costs associated with sales, general and administrative expenses, and the startup costs regarding with the Zhejiang operations. Depreciation and amortization expenses for the first quarter were RMB7.9 million ($1.2 million), compared to RMB7.1 million in the prior year period. Operating margin expanded to 38.5%, up from 35.2% in the prior year period, benefiting from increasing economies of scale and surging subscriber numbers.

Research and Development Expenses. Research and development expenses increased to RMB2.3 million ($0.4 million) compared to RMB1.8 million in the prior year period, a reflection of the Company's continuous efforts to enhance our operations through technology advancement in relation to cord blood stem cell preservation.

Sales and Marketing Expenses. Sales and marketing expenses, a key driving force behind our revenue growth, increased by 52.5% to RMB19.2 million ($3.0 million) from RMB12.6 million in the prior year period. These expenses reflected the Company's efforts to further penetrate into the Beijing and Guangdong markets and the gradual development of costs to build up sales channels and personnel that serve the Zhejiang market. Sales and marketing expenses represented 16.7% of revenues in the first quarter of fiscal 2013, up from 14.4% in the prior year period and up by less than one percentage point compared to the fourth quarter of fiscal 2012.

General and Administrative Expenses. General and administrative expenses were RMB25.1 million ($3.9 million). As a percentage of revenue, it declined to 21.7% compared to 25.7% in the prior year period and compare to 23.1% in the fourth quarter in fiscal 2012.

OTHER INCOME AND EXPENSES

Interest Expense. The Company recorded an interest expense of RMB10.2 million ($1.6 million) compared to RMB0.5 million in the prior year period, which was largely attributable to the issuance of a convertible note to KKR in April 2012. During the period, interest expense related to the convertible note annual coupon payment amounted to RMB5.1 million ($0.8 million) and the interest amortization charge amounted to RMB3.7 million ($0.6 million).

Other. For the first quarter of fiscal 2012, the Company recorded dividend income of RMB7.2 million from the Company's equity investment in the Shandong Cord Blood Bank. No such dividend from Shandong Cord Blood Bank was recorded in first quarter of fiscal 2013. The Company recorded RMB2.4 million ($0.4 million) of dividend income from Cordlife Group Limited ("Cordlife") during the first quarter of fiscal 2013.

NET INCOME ATTRIBUTABLE TO SHAREHOLDERS. The surge in operating income was offset by an increase in interest expense in relation to the convertible note, absence of dividend income of RMB7.2 million from our investment in Shandong Cord Blood Bank and the absence of a discrete tax benefit of RMB10.2 million in the first quarter of fiscal 2012 when the Company's Guangdong subsidiary was accredited as "High and New Technology Enterprise". As a result, net income attributable to shareholders for the first quarter of fiscal 2013 fell by 22.3% to RMB31.1 million ($4.9 million) from RMB40.0 million in the prior year period. Net margin for the first quarter of fiscal 2013 stood at 27.0%, down from 45.8% in the prior year period.

EARNINGS PER SHARE. The terms of the convertible note issued to KKR provides KKR with the ability to participate in any Excess Cash Dividend[2]. Therefore, the calculation of basic EPS has taken into consideration of KKR's participating right effect of RMB0.02. Basic and diluted earnings per ordinary share for the first quarter of fiscal 2013 were RMB0.41 ($0.06).

LIQUIDITY. As of June 30, 2012, the Company had cash and cash equivalents of RMB1,146.7 million ($180.5 million) compared to RMB794.3 million as of March 31, 2012. The Company had total debt of RMB416.4 million ($65.5 million) as of June 30, 2012. Operating cash flow for the quarter amounted to RMB136.9 million ($21.5 million).

Ms. Zheng concluded, "Our Guangdong operation continues to deliver impressive performance. In order to sustain momentum in this highly promising market, we are expanding our operations there with a new facility. We anticipate that it will commence operating in two years and will be able to provide a platform for next-stage growth. As we increase our capacity in Guangdong, we will also acquire a minority interest in Guangzhou Municipality Tianhe Nuoya Bio-engineering Co., Ltd., the Company's operating arm in Guangdong province from Cordlife. This is pursuant to our recently announced alliance-building transactions. Upon completion of the announced transactions, Cordlife will become an affiliate of our group by holding approximately 10% equity interest in CCBC. This strategic alliance represents immense value for our existing shareholders as we can develop a strategic presence throughout Asia and benefit from Cordlife's Asia-wide expertise to better serve existing and prospective customers."

[2] "Excess Cash Dividend" means any cash dividend to holders of shares that, together with all other cash dividends previously paid to holders of shares in the same financial year, exceeds, on a per share basis, an amount equal to the interest that has accrued and shall accrue at 7% in such financial year divided by the number of shares into which the note is convertible at the conversion price then in effect on the relevant record date.

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[dDT]

IRF - International Rectifier Reports Fourth Quarter and Fiscal Year 2012 Results and Announces Operational Restructuring

Business WirePress Release: International Rectifier Corporation – 43 minutes ago

EL SEGUNDO, Calif.--(BUSINESS WIRE)--

International Rectifier Corporation (IRF) today announced financial results for the fourth quarter (ended June 24, 2012) of its fiscal year 2012. Revenue for the fourth quarter fiscal year 2012 was $269.7 million, an 8.7% increase from $248.1 million in the third quarter fiscal year 2012 and a 15% decrease from $317.2 million in the fourth quarter fiscal year 2011.

International Rectifier reported net loss for the fourth quarter of $68.2 million, or $0.99 per fully diluted share. The fourth quarter results included a $69.4 million goodwill impairment, a $21.2 million gross tax benefit, $4.4 million in asset impairment charges and inventory write-offs associated with the Company’s El Segundo facility closure, $1.7 million in amortization of acquisition related intangibles and $1.7 million in severance charges. Combined, these items negatively impacted fully diluted earnings per share by $0.81.

Revenue for fiscal year 2012 was $1.05 billion, a 10.3% decrease from $1.18 billion in the prior fiscal year. Net loss for fiscal year 2012 was $55.1 million or $0.79 per fully diluted share compared with net income of $166.5 million or $2.33 per fully diluted share for fiscal year 2011.

President and Chief Executive Officer Oleg Khaykin stated: “Weak demand in our end markets significantly impacted our results over the 2012 fiscal year. Despite the challenging end-market environment, we continue to execute well on new product introductions, technology development and design wins. We continue to believe that our leadership positions in digital power management, IGBTs and gallium nitride will enable future growth when demand recovers.”

Gross margin for the fourth quarter was 25.9% compared with 29.8% in the prior quarter and 37.2% in the fourth quarter fiscal year 2011. Fourth quarter cost of sales included $4.4 million in asset impairment charges and inventory write-offs associated with the Company’s El Segundo facility closure that negatively impacted gross margin by 1.6 percentage points.

Research and development expenses for the fourth quarter fiscal year 2012 were $35.1 million compared with $34.8 million in the third quarter fiscal year 2012.

Selling, general and administrative expenses for the fourth quarter fiscal year 2012 were $51.3 million, which included $1.7 million in severance charges, compared with $49.6 million in the third quarter fiscal year 2012.

Operating loss was $87.7 million compared with an operating loss of $7.1 million in the prior quarter and operating income of $30.6 million in the fourth quarter fiscal year 2011. Fourth quarter operating loss included a $69.4 million goodwill impairment, $4.4 million in asset impairment charges and inventory write-offs associated with the company’s El Segundo facility closure, $1.7 million in amortization of acquisition related intangibles and $1.7 million in severance charges. Combined, these items negatively impacted operating loss by $77.2 million.

Cash, cash equivalents and marketable investments at the end of the quarter totaled $385.9 million including $1.5 million in restricted cash, up $19.7 million compared with the prior quarter.

Cash provided by operating activities for the quarter was $58.3 million.

The Company had 69,231,006 shares outstanding at the end of the quarter.

Operational Restructuring Activities

“Given the prolonged weak demand and uncertainty, both in our end-markets and in the overall macroeconomic conditions, we believe this is the right time to resume the operational transformation of the Company in line with our long-term strategy,” said Mr. Khaykin. “We are taking steps to reduce our internal manufacturing footprint and lower our operating expenses in order to align our cost structure with current business conditions.”

Today, the Company announced operational restructuring activities including the closure of its El Segundo, California, fabrication facility. The Company expects to complete the closure of this facility by the end of March 2013. The closure of this facility is expected to save approximately $10 million per year when completed.

In conjunction with the operational restructuring activities, the Company is also resizing its Newport, Wales, fabrication facility, which is expected to continue in several phases through the middle of calendar year 2015. The Company is in the process of finalizing the Newport facility resizing plan, and expects to include an estimate of the cost savings related to this item when it reports its first quarter fiscal year 2013 results.

The Company has also initiated cost reductions in operating expenses. The reduction is expected to save approximately $20 million in operating expenses on an annualized basis starting in the December quarter of 2012.

September Quarter Outlook

Oleg Khaykin noted: “With weak end-market demand in the white goods and industrial end markets, particularly in Asia and Europe, we currently expect September quarter revenue to range between $235 million to $250 million. Gross margin is expected to be about 28%.

“Present difficulties notwithstanding, we continue to be optimistic about our long-term growth prospects and are using the near-term weakness to restructure our manufacturing footprint and operating expenses and increase IR’s future operating leverage,” concluded Mr. Khaykin.

The following table outlines International Rectifier’s projected September quarter outlook:

Revenue $235 to $250 million
Gross margin 28%
Operating expenses
Research and development $34 million
Sales, general and administrative $47 million
Severance charges
$8 to $9 million
Amortization of acquisition related intangibles $1.7 million
Other expense, net $1 million
Foreign tax accruals $3 million


Segment Table Information/Customer Segments

The business segment tables included with this release for the Company’s fiscal quarters ended June 24, 2012, March 25, 2012 and June 26, 2011, respectively, and fiscal years ended June 24, 2012, and June 26, 2011, respectively, reconcile revenue and gross margin for the Company’s segments to the consolidated total amounts of such measures for the Company.

Annual Report on Form 10-K

The Company expects to file its Annual Report on Form 10-K for the 2012 fiscal year with the Securities and Exchange Commission on Thursday, August 23, 2012. This financial report will be available for viewing and download at http://investor.irf.com.

NOTE: A conference call will begin today at 2:00 p.m. Pacific time. CEO Oleg Khaykin and CFO Ilan Daskal will discuss the company’s June quarter results and September quarter outlook. All participants, both in the U.S. and international, may join the call by dialing 706-679-3195 by 1:55 p.m. Pacific time. In order to join this conference call, participants will be required to provide the Conference Passcode: “International Rectifier.” Participants may also listen over the Internet at http://investor.irf.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download, and install any necessary audio software.

A taped replay of this call will be available from approximately 6:00 p.m. Pacific time on Wednesday, August 22, through Wednesday, August 29, 2012. To listen to the replay by phone, call 855-859-2056 or 404-537-3406 for international callers and enter reservation number 13762500. To listen to the replay over the Internet, please go to http://investor.irf.com. The live call and replay will also be available on www.streetevents.com.

About International Rectifier

International Rectifier Corporation (IRF) is a world leader in power management technology. IR’s analog, digital, and mixed signal ICs, and other advanced power management products, enable high performance computing and save energy in a wide variety of business and consumer applications. Leading manufacturers of computers, energy efficient appliances, lighting, automobiles, satellites, aircraft, and defense systems rely on IR’s power management solutions to power their next generation products. For more information, go to www.irf.com.

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[dDT]

SNPS - Synopsys Posts Financial Results for Third Quarter Fiscal Year 2012

Q3 2012 Financial Highlights
- Revenue: $443.7 million
- GAAP earnings per share: $0.50
- Non-GAAP earnings per share: $0.55
PR NewswirePress Release: Synopsys, Inc. – 35 minutes ago

MOUNTAIN VIEW, Calif., Aug. 22, 2012 /PRNewswire/ -- Synopsys, Inc. (SNPS), a world leader in software and IP used in the design, verification and manufacture of electronic components and systems, today reported results for its third quarter of fiscal year 2012.

For the third quarter of fiscal year 2012, Synopsys reported revenue of $443.7 million, compared to $386.8 million for the third quarter of fiscal year 2011, an increase of 14.8 percent.

"Our business is strong, reflected in the excellent results we delivered in the third quarter," said Aart de Geus, chairman and co-CEO of Synopsys. "We see our customers continuing to drive design aggressively, even in the context of an uncertain economy. The electronic design automation and IP industries are increasing in importance, and Synopsys in particular is well-positioned to accelerate innovation due to its combination of financial strength, technology leadership, global support, and strategic vision."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2012 was $75.7 million, or $0.50 per share, compared to $52.1 million, or $0.35 per share, for the third quarter of fiscal year 2011.

Non-GAAP Results

On a non-GAAP basis, net income for the third quarter of fiscal year 2012 was $82.3 million, or $0.55 per share, compared to non-GAAP net income of $68.1 million, or $0.46 per share, for the third quarter of fiscal year 2011.

Financial Targets

Synopsys also provided its financial targets for the fourth quarter and full fiscal year 2012. These targets do not include any impact from the pending acquisition of SpringSoft, or other future acquisition-related expenses that may be incurred in fiscal year 2012. These targets constitute forward-looking information and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.

Fourth Quarter of Fiscal Year 2012 Targets:

Revenue: $440 million - $448 million
GAAP expenses: $387 million - $403 million
Non-GAAP expenses: $345 million - $355 million
Other income and expense: ($2) million - $0 million
Tax rate applied in non-GAAP net income calculations: approximately 24 percent
Fully diluted outstanding shares: 150 million - 154 million
GAAP earnings per share: $0.22 - $0.28
Non-GAAP earnings per share: $0.46 - $0.48
Revenue from backlog: greater than 90 percent

Full Fiscal Year 2012 Targets:

Revenue: $1.742 billion - $1.750 billion
Other income and expense: $1 million - $3 million
Tax rate applied in non-GAAP net income calculations: approximately 24 percent
Fully diluted outstanding shares: 148 million - 152 million
GAAP earnings per share: $1.25- $1.31
Non-GAAP earnings per share: $2.09 - $2.11
Cash flow from operations: approximately $450 million

GAAP Reconciliation

Synopsys continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its ongoing business operations and what Synopsys uses to evaluate its ongoing operations and for internal planning and forecasting purposes. Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Synopsys' management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, (iv) other significant items, including facilities restructuring charges and the effect of benefits from tax settlements with tax authorities, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments; and the non-GAAP measures that exclude such information in order to assess the performance of Synopsys' business and for planning and forecasting in subsequent periods. Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed below.

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[dDT]

PSUN - Pacific Sunwear Announces Second Quarter Operating Results; Issues Third Quarter Guidance

- Comparable Sales Up 5%
GlobeNewswirePress Release: Pacific Sunwear of California, Inc. – 38 minutes ago

ANAHEIM, Calif., Aug. 22, 2012 (GLOBE NEWSWIRE) -- Pacific Sunwear of California, Inc. (PSUN) (the "Company"), announced today that net sales for the second quarter of fiscal 2012 ended July 28, 2012, were $210.3 million versus net sales of $200.9 million for the second quarter of fiscal 2011 ended July 30, 2011.

On a GAAP basis, the Company reported a loss from continuing operations of $17.5 million, or $(0.26) per share, for the second quarter of fiscal 2012, compared to a loss from continuing operations of $17.5 million, or $(0.26) per share, for the second quarter of fiscal 2011. The loss from continuing operations for the Company's second quarter of fiscal 2012 included a non-cash loss of $8.2 million, or $0.12 per share, related to a derivative liability that resulted from the issuance of the Convertible Series B Preferred Stock (the "Series B Preferred") in connection with the term loan financing the Company completed in December 2011.

On a non-GAAP basis, excluding the non-cash loss on derivative liability and using a normalized annual income tax rate of approximately 37%, the Company's loss from continuing operations for the second quarter of fiscal 2012 would have been $5.8 million, or $(0.08) per share, as compared to a loss from continuing operations of $11.1 million, or $(0.17) per share, for the same period a year ago.

"Our 5% comparable store sales, 260 basis point increase in merchandise margins, and positive operating cash flow for the second quarter further demonstrate our belief that customers are beginning to rediscover PacSun, including our improved merchandising and brand mix, and our distinct Golden State of Mind brand identity," said Gary H. Schoenfeld, President and Chief Executive Officer. "Newer brands helped drive a 7% comp in our Men's business, which represents our biggest increase in Men's since 2004. Women's continued to improve as well with a 2% comp and higher margins, and we also achieved a 15% increase in online sales."

Financial Outlook for Third Fiscal Quarter of 2012

The Company's guidance range for the third quarter of fiscal 2012 contemplates a non-GAAP net loss per share from continuing operations of between negative 8 cents and flat.

The forecasted third quarter non-GAAP loss from continuing operations per share guidance range is based on the following assumptions:

Same-store sales of negative 2% to plus 2%;
Gross margin rate, including buying, distribution and occupancy, of 25% to 28%;
SG&A expenses in the range of $62 million to $64 million; and
A normalized annual income tax rate of approximately 37%.

The Company's third fiscal quarter of 2012 guidance range excludes the quarterly impact of the change in the fair value of the derivative liability due to the inherently variable nature of this financial instrument.

Discontinued Operations

In accordance with applicable accounting literature and consistent with the Company's financial statement presentation in its fiscal 2011 annual report, the Company has reclassified the results of operations of its closed stores as discontinued operations for all periods presented, as applicable.

Derivative Liability

In fiscal 2011, as a result of the issuance of the Series B Preferred in connection with the Company's $60 million senior secured term loan financing with an affiliate of Golden Gate Capital, the Company recorded a derivative liability equal to approximately $15.0 million, which represents the fair value of the Series B Preferred upon issuance. In accordance with applicable U.S. GAAP, the Company has marked this derivative liability to fair value through earnings and will continue to do so on a quarterly basis until the shares of Series B Preferred are either converted into shares of the Company's common stock or until the conversion rights expire (December 2021). The Company's third fiscal quarter of 2012 earnings guidance excludes the quarterly impact of the change in the fair value of the derivative liability due to the inherently variable nature of this financial instrument.

About Pacific Sunwear of California, Inc.

Pacific Sunwear of California, Inc. and its subsidiaries (collectively, "PacSun" or the "Company") is a leading specialty retailer rooted in the action sports, fashion and music influences of the California lifestyle. The Company sells a combination of branded and proprietary casual apparel, accessories and footwear designed to appeal to teens and young adults. As of August 22, 2012, the Company operates 727 stores in all 50 states and Puerto Rico. PacSun's website address is www.pacsun.com.

The Company will be hosting a conference call today at 4:30 p.m. Eastern time to review the results of its second fiscal quarter. A telephonic replay of the conference call will be available, beginning approximately two hours following the call, for one week and can be accessed in the United States and Canada at [phone] or internationally at [phone]; passcode: 78167566. For those unable to listen to the live Web broadcast or utilize the call-in replay, an archived version will be available on the Company's investor relations website through midnight, November 28, 2012.

About Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles, please see the accompanying table titled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures" and the section following such table titled "About Non-GAAP Financial Measures."

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[dDT]

KKD - Krispy Kreme Reports Financial Results for the Second Quarter of Fiscal 2013

Management Targets High End of Full Year Outlook
PR NewswirePress Release: Krispy Kreme Doughnut Corporation – 31 minutes ago


WINSTON-SALEM, N.C., Aug. 22, 2012 /PRNewswire/ -- Krispy Kreme Doughnuts, Inc. (NYSE: KKD) (the "Company") today reported financial results for the second quarter of fiscal 2013, ended July 29, 2012. The Company also reaffirmed its outlook for the full fiscal year and is targeting the high end of its previously announced range.

Second Quarter Fiscal 2013 Highlights Compared to the Year-Ago Period:

Revenues increased 4.3% to $102.1 million from $98.0 million
Company same store sales rose 5.4%, the fifteenth consecutive quarterly increase
Operating income rose 87% to $9.2 million from $4.9 million
Adjusted net income rose 95% to $8.2 million ($0.12 per share) from $4.2 million ($0.06 per share); adjusted net income and adjusted EPS reflect income tax expense only to the extent currently payable in cash and, in the second quarter of fiscal 2012, exclude the after-tax gain on the sale of the Company's 30% equity interest in KK Mexico; adjusted net income and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings in the table accompanying this release)
Net income was $4.9 million ($0.07 per share) compared to $8.8 million ($0.12 per share) in the second quarter last year; net income for the second quarter of fiscal 2013 reflects a substantially higher book income tax rate compared to the second quarter of fiscal 2012 as more fully described below; net income for the second quarter of fiscal 2012 included an after-tax gain on the sale of the Company's 30% equity interest in KK Mexico of $4.7 million ($0.06 per share)
Cash provided by operating activities was $12.6 million compared to $7.6 million in the second quarter last year
The Company completed its $20 million share repurchase in the quarter, purchasing 2,858,000 shares at an average price of $6.35; cumulatively, the Company purchased 3,113,000 shares at an average price of $6.42

The Company ended the second quarter of fiscal 2013 with a total of 711 Krispy Kreme stores systemwide, a net increase of 19 shops during the quarter. As of July 29, 2012, there were 93 Company stores and 618 franchise locations.

President and Chief Executive Officer James H. Morgan commented: "We were very pleased with our quarterly performance, as we drove both solid same store sales growth and increased guest traffic. The top-line momentum translated into significant year-over-year increases in both operating income and adjusted earnings per share. The period was highlighted by our 75th Birthday celebration and by National Doughnut Day, each of which provided consumers another reason to visit Krispy Kreme and create some lasting joyful memories." Morgan continued, "Based on our performance to date, we are reiterating our operating income guidance for the full year of $29 to $33 million, although we now believe the high end of that range is increasingly achievable."

Full Year Outlook

Management expects fiscal 2013 operating income of between $29 and $33 million, compared to $25.6 million in fiscal 2012, and fiscal 2013 adjusted EPS, which includes income tax expense only the extent currently payable in cash, of between $0.36 and $0.42, compared to $0.31 in fiscal 2012; adjusted EPS for fiscal 2012 also excludes the gain on the sale of the Company's 30% equity interest in KK Mexico. Adjusted net income and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings in the table accompanying this release).

Management expects fiscal 2013 GAAP EPS of between $0.22 and $0.25, reflecting an estimated tax rate of 45%. The higher tax rate compared to fiscal 2012 is a result of the required reversal of valuation allowances on deferred tax assets in the fourth quarter of fiscal 2012, as described in the Company's March 20, 2012 earnings release and in the Company's annual report on Form 10-K filed on March 30, 2012. Because the Company has substantial net operating loss carryovers, the amount of taxes payable in cash is expected to remain insignificant for the foreseeable future.

The expected range for both fiscal 2013 adjusted and GAAP EPS is $0.01 per share higher than management's previous guidance and reflects the completion of the $20 million share repurchase.

Second Quarter Fiscal 2013 Results

Consolidated Results

For the second quarter ended July 29, 2012, revenues increased 4.3% to $102.1 million from $98.0 million.

Direct operating expenses were unchanged at $85.7 million, but as a percentage of total revenues fell to 83.9% from 87.5%. General and administrative expenses decreased to $4.8 million from $4.9 million in the year-ago period and, as a percentage of total revenues, decreased to 4.7% from 5.0%.

Operating income increased to $9.2 million from $4.9 million.

Adjusted net income was $8.2 million ($0.12 per share) compared to $4.2 million ($0.06 per share) in the second quarter last year. Adjusted net income and adjusted EPS reflect income tax expense only to the extent currently payable in cash and, in the second quarter of last year, exclude the gain on the sale of the Company's 30% equity interest in KK Mexico. Adjusted net income and adjusted EPS are non-GAAP measures (see the reconciliation of GAAP to adjusted earnings in the table accompanying this release).

Net income was $4.9 million ($0.07 per share) compared to $8.8 million ($0.12 per share), in the second quarter last year. Last year's results included an after tax gain of $4.7 million ($0.06 per share) on the sale of the Company's interest in KK Mexico. In addition, net income and EPS for the second quarter of fiscal 2013 reflect a book tax rate of 45% compared to a rate of 12% in the second quarter last year (exclusive of the KK Mexico gain). The increase reflects the reversal of valuation allowances on deferred tax assets in the fourth quarter of fiscal 2012. Accordingly, net income and EPS for the second quarter of fiscal 2013 are not comparable to those for the second quarter of fiscal 2012.

Segment Results

Company Stores revenues increased 5.1% to $69.3 million from $66.0 million. Same store sales at Company stores rose 5.4%, the fifteenth consecutive quarterly increase, and were driven by higher traffic. The Company Stores segment posted operating income of $338,000 compared to an operating loss of $1.0 million in the second quarter last year.

Domestic Franchise revenues rose 3.4% to $2.4 million from $2.3 million, reflecting higher royalties partially offset by lower initial franchise fees. Total sales by domestic franchisees rose 7.3%, while same store sales increased 6.7%. Domestic Franchise segment operating income improved to $1.3 million compared to $216,000 in the second quarter last year. Last year's results included a charge of $820,000 for estimated payments under a lease guarantee related to a franchisee whose franchise agreements were terminated in the second quarter of fiscal 2012.

International Franchise revenues increased 8.0% to $5.8 million from $5.4 million, driven by higher royalty revenues. Sales by international franchise stores rose 7.1%. Adjusted to eliminate the effects of changes in foreign exchange rates, same store sales at international franchise stores fell 10.0%, reflecting, among other things, honeymoon effects from the substantial number of international store openings in recent years, as well as cannibalization as markets develop. The International Franchise segment generated operating income of $4.2 million, up from $3.4 million in the second quarter last year.

KK Supply Chain revenues (including sales to Company stores) rose 2.2% to $51.5 million from $50.3 million in the same period last year. External KK Supply Chain revenues rose 1.3% to $24.6 million from $24.3 million in the year-ago period. KK Supply Chain generated operating income of $8.4 million in the second quarter of fiscal 2013, up from $7.7 million in the second quarter last year. This year's results reflect favorable mark-to-market adjustments on agricultural derivatives of approximately $1.1 million.

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