`trends, could have a material adverse effect on our business, financial condition and results of operations. For example, in fiscal 2007 we were
`negatively impacted from the popularity of certain styles in the non—matemity women’s apparel market, such as trapeze and baby—doll dresses and
`tops, which can more readily fit a pregnant woman early in her pregnancy than typical no11-matcmity fashions.
`
`Thefailure to attract and retain highly skilled and qualified senior management personnel could have a material adverse impact on our
`business, financial condition and results of operations.
`Our business requires disciplined execution at all levels of our organization in order to timely deliver and display fashionable merchandise in
`appropriate quantities in our stores. This execution requires experienced and talented management. We currently have a management team with a
`great deal of experience with us a11d in apparel retailing. If we were to lose the benefit of tl1is experience, our business, financial conditio11 and
`results of operations could be materially and adversely affected. On November 6, 2009, we announced the retirement ofRebecca Matthias, our co-
`founder, at the end of fiscal 2010. Pursuant to our transition agreement with Ms. Matthias, she will be a full—time employee ofthe Company until
`June 5, 2010. After June l5, 2010, Ms. Matthias will remain in an employment relationship with us on a part—time basis through September 30, 2010,
`and will then provide consulting services to us, as requested, through September 30, 2012. If we were unable to compensate for the loss of tlie
`benefit of \ls. \/latthias’ experience, our business, financial condition and results ofoperations could be materially and adversely affected.
`In addition, as our business expands, we believe that our success will depend greatly on our continued ability to attract and retain highly
`skilled and qualified personnel. There is a high level of competition for personnel in the retail industry. Like most retailers, we experience significant
`employee turnover rates, particularly among store sales associates and managers, and our continued growth will require us to hire and train even
`more new personnel. V\7e therefore must continually attract, hire and train new personnel to meet o11r staffing needs. We constantly compete for
`qualified personnel with companies in our industry and in other industries. A significant increase in the turnover rate among our sales associates
`and managers would increase our recruiting and training costs and could decrease our operating efficiency and productivity. If we are unable to
`retain our employees or attract, train. assimilate or retain other skilled personnel in the future, we may not be able to service our customers as
`effectively, which could impair our ability to increase sales and could otherwise harm our business.
`
`Our quarterly operating results and inventory levels may fluctuate significantly as a result ofseasonality in our business.
`Our business, like that of other retailers, is seasonal. Results for any quarter are not necessarily indicative of the results that may be
`achieved for a full fiscal year. Quarterly results may fluctuate materially depending upon, among other things, increases or decreases in comparable
`store sales, the timing of new store openings and new leased department openings, net sales a11d profitability contributed by new stores and
`leased departments, the timing of the fulfillment of purchase orders under our product and license arrangements, adverse weather conditions,
`shifts ill the timing of certai11 holidays and promotions, changes in inventory a11d production levels and the timing of deliveries of inventory, and
`changes in our merchandise mix. Our quarterly net sales have historically been highest in our third fiscal quarter, corresponding to the Spring
`selling season, followed by our first fiscal quarter, corresponding to the Fall/holiday selling season. Given the historically higher sales level in our
`third fiscal quarter and the relatively fixed nature of most of our operating expenses and interest expense. we have typically generated a very
`significant percentage of our full year operating in come and net income during our third fiscal quarter. Thus, any factors which result in a material
`reduction of o11r sales for the third quarter could have a material adverse effect o11 our results of operations for our fiscal year as a whole. Seasonal
`fluctuations in sales also affect our inventory levels, as we usually order merchandise in advance of peak selling periods and sometimes before
`new fashion trends are confirmed by customer purchases. We must carry a significant amount of inventory, especially before the Fall/holiday and
`Spring selling seasons. If we are not successful in selling our inventory during this period. we may be forced to rely on markdowns or promotional
`sales to sell the excess inventory or we may not be able to sell the inventory at all, which could have a material adverse effect on our business,
`financial condition and results of operations.
`
`23
`
`Source: DESTINATION MATERNITY CORP., 10-K, 12/14/2009 I Powered by Intelligize
`
`DMC Exhibit 2040_023
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`Our business depends on sustained demandfor maternity clothing and is sensitive to birth rates, women ’sfashion tren dv, econ umic conditions
`and consumer spending.
`Our business depends upon sustained demand for matemity clothing. Our future performance will be subject to a number of factors beyond
`our control, including demographic changes, fashion trends, economic conditions and consumer spending. If demand for maternity clothing were
`to decline for any reason. such as a decrease in the number of pregnancies, our operating results could be adversely affected. Additionally, our
`operating results could be adversely affected if certain non-matemity women’s apparel fashions have a more pregnancy-fiiendly fit. For example, in
`fiscal 2007, we were negatively impacted by the popularity of certain styles i11 the non-maternity women’s apparel market, such as trapeze and
`baby-doll dresses a11d tops, which can more readily fit a pregnant woman early i11 her pregnancy than typical 11on-maternity fashions. Downturns,
`or the expectation of a downturn, in general economic conditions could adversely affect consumer spending patterns, our business, financial
`condition and results of operations. In addition, the specialty apparel retail business historically has been subject to cyclical variations. Consumer
`purchases of specialty apparel products, including maternity wear, may decline during recessionary periods and at other times when disposable
`income is lower. Declines in consumer spending patterns may have a more negative effect o11 apparel retailers than some other retailers. Therefore,
`we may not be able to maintain our historical sales and earnings, or remain as profitable, if there is a decline in consumer spending patterns. A
`prolonged economic downturn could have a material adverse impact on our business and results of operations.
`
`If an independent manufacturer violates labor or other laws, or is accused of violating any such laws, or
`those generally accepted as ethical, it could harm our business and brand image.
`While we maintain policies and guidelines with respect to labor practices that independent manufacturers that produce goods for us are
`contractually required to follow, and while we have an independent firm and Company employees inspect certain manufacturing sites to monitor
`compliance, we cannot control the actions of such manufacturers or the public’s perceptions of them, nor can we assure that these manufacturers
`will conduct their businesses using ethical or legal labor practices. Apparel companies can be heldjointly liable for the wrongdoings ofthe
`manufacturers of their products. While many of our independent manufacturers are routinely monitored by buying representatives, who assist us
`in the areas of compliance, garment quality and delivery, we do not control the manufacturers’ business practices or their employees’ employment
`conditions, and manufacturers act in their own interest which may be in a manner that results in negative public perceptions of us, and/or
`employee allegations against us or court determinations that we are jointly liable. Violations of law by our importers, buying agents, manufacturers
`or distributors could result in delays in shipments and receipt of goods and could subject us to fines or other penalties, any of which could restrict
`o11r business activities, increase our operating expenses or cause our sales to decline.
`
`their labor practices diverge from
`
`We may be unable to protect our trademarks and other intellectual property and may be subject to liability if we are alleged to have infringed
`on an oth er party ’s intellectual property.
`We believe that our trademarks, service marks and other intellectual property are important to our continued success and our competitive
`position due to their recognition with our customers. We devote substantial resources to the establishment and protection ofour trademarks,
`service marks and other intellectual property. Although we actively protect our intellectual property, there can be no assurance that the actions
`that we have taken to establish and protect our trademarks, service marks and other intellectual property, including our rights in our management
`information systems and our proprictary rights in products for which we have applied for patent protcction (for cxamplc, our Sccrct l~'it Bcllym
`innovation). will be adequate to prevent imitation of our marks, products or services by others or to prevent others from seeking to block sales of
`our products as a violation of their trademarks, service marks or other proprietary rights. Also, others may assert rights in, or ownership of, our
`trademarks and other proprietary rights or may allege that we have or are infringing on their intellectual property rights and we may not be able to
`successfully resolve these types of conflicts. In addition, the laws of certain foreign countries may not protect our trademarks and proprietary
`rights to the same extent as
`
`24
`
`Source: DESTINATION MATERNITY CORP., 10-K, 12/14/2009 I Powered by Intelligize
`
`DMC Exhibit 2040_O24
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`do the laws ofthe United States. We cannot assure you that these registrations will prevent imitation of our name, merchandising concept, store
`design or private label merchandise, or the infringement of our other intellectual property rights by others. Imitation of our name, concept, store
`design or merchandise in a manner that projects lesser quality or carries a negative connotation of our brand image could have a material adverse
`effect on our business. financial condition and results of operations. Additionally, the high expense i11 both prosecuting and defending against,
`and potential liability related to, alleged infringements of intellectual property rights could be substantial a11d could have a material adverse effect
`on our business, financial condition a11d results of operations.
`
`War or acts ofterrorism or the threat of eith er may negatively impact availability of merchandise and otherwise adversely impact our
`business.
`
`I11 the event of war or acts of terrorism, or if either is threatened, our ability to obtain merchandise available for sale maybe negatively
`affected. A substantial portion of our merchandise is imported from other countries. If goods become difficult or impossible to import into the
`United States, and if we cannot obtain such merchandise from other sources at similar costs, our sales and profit margins may be adversely
`affected. In the event that commercial transportation is curtailed or substantially delayed, our business may be adversely impacted, as we may
`have difficulty shipping merchandise to our main distribution facility and retail locations, as well as fulfilling Internet orders.
`
`The terms of our debt instruments imposefinancial and operating restrictions.
`Our credit facility and tenn loan agreements each contain restrictive covenants that limit our ability to engage in activities that may be in our
`long term best interests. These covenants limit or restrict, among other things, our ability to:
`-
`incur additional indebtedness;
`-
`pay dividends or make other distributions in respect of our equity securities, or purchase or redeem capital stock, or make certain
`investments",
`
`- have our subsidiaries pay dividends, make loa11s or transfer assets to us;
`-
`sell assets, including the capital stock of our subsidiaries;
`-
`enter into any transactions with o11r affiliates;
`-
`transfer any capital stock of any subsidiary or permit any subsidiary to issue capital stock;
`-
`create liens;
`-
`enter into certain sale/leaseback transactions; and
`effect a consolidation or merger or transfer of all or substantially all of our assets.
`These limitations and restrictions may adversely affect our ability to finance our future operations or capital needs or engage in other
`business activities that may be in our best interests. In addition, our ability to borrow under the credit facility is subject to borrowing base
`requirements. If we breach any ofthe covenants in our credit facility or term loan agreements, we may be in default under our credit facility and/or
`o1Lr term loan. If we defa11lt, the lenders under o11r term loan or the lender under our credit facility eo11ld declare all borrowings owed to them,
`including accrued interest and other fees, to be due and payable.
`
`Our chatter documents contain certain anti-takeover provisions, and we are entitled to certain oth er protective provisions under Delaware
`law.
`
`We are a Delaware corporation and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to
`acquire control of the Company, even if a change of control would be beneficial to our existing stockholders. We also have adopted a stockholder
`rights plan, commonly known as a “poison pill,” that entitles our stockholders to acquire additional shares of us, or a potential acquirer of us, at a
`25
`
`Source: DESTINATION MATERNITY CORP., 10-K, 12/14/2009 I Powered by Intelligize
`
`DMC Exhibit 2040_O25
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`substantial discount to their market value in the event of an attempted takeover. In addition, our amended and restated certificate of incorporation
`and by-laws contain provisions that may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider
`favorable by, among other things:
`-
`authorizing the issuance of preferred stock, the terms of which maybe determined at the discretion of o11r Board of Directors;
`-
`restricting the ability of stockholders to call special meetings of stockholders; and
`-
`establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can he acted
`on by stockholders at meetings.
`These provisions 1nay also reduce the market value of our common stock.
`
`We do not expect to pay cash dividends in theforeseeablefature.
`We l1ave 11ot paid any cash dividends on our common stock since our initial public offering and do 11ot anticipate paying cash dividends on
`our common stock in the foreseeable future. In addition, the terms of each of our credit facility and term loan agreements restrict our ability to
`declare or pay dividends on our common stock. Even if our ability to pay dividends were not restricted, any future payment of dividends would
`still be at the discretion of our Board of Directors and would be based upon any applicable restrictive financial covenants, earnings, capital
`requirements a11d our financial condition, among other factors, at the time any such dividend is considered.
`
`Any increase in our sales and marketing eflorts that target markets outside the United States and Canada would expose as to additional risks
`associated with international operations.
`Although an immaterial amount of our sales are currently derived from international sales outside of Canada, we are actively seeking to
`expand our international presence, and we have begun to do so through franchise arrangements in the Middle East and India. We may not be
`successful in these efforts. International operations and sales subject us to risks and challenges that we would otherwise not face if we conducted
`our business only in the United States. For example, we may depend on third parties to market our products through foreign sales channels, and
`we may be challenged by laws and business practices favoring local competitors. In addition, our ability to succeed in foreign markets will depend
`on our ability to protect our intellectual property. We must also adapt our pricing structure to address different pricing environments and may face
`difficulty in enforcing revenue collection internationally. Emerging markets are a significant focus of our international growth strategy. The
`developing 11atL1re of these markets presents a number of risks. Deterioratioll of social, political, labor, or economic conditions i11 a specific country
`or region and difficulties in staffing and managing foreign operations may also adversely affect our operations or financial results or those of our
`franchisees. Operations outside the United States may be affected by changes in trade protection laws, policies and measures, and other
`regulatory requirements affecting trade and investment, including the Foreign Corrupt Practices Act and local laws prohibiting corrupt payments.
`To the extent we achieve significant sales outside of the United States in the fi1l'Ll1‘6, we may have significant exposure to fluctuating foreign
`currency exchange rates.
`
`We could havefailures in our system of internal controls.
`We maintain a documented system of internal controls which is reviewed and monitored by management, who meet regularly with our Audit
`Committee of tlie Board of Directors. We believe we have a well-designed system to maintain adequate internal controls on the business. We
`cannot assure you that there will not be any control deficiencies in the future. Should we hecoine aware of any control deficiencies, we would
`report them to the Audit Committee and recommend prompt remediation. We have devoted significant resources to document, test, monitor and
`improve our internal controls and will continue to do so; however, we cannot be certain that these measures will ensure that our controls are
`adequate in the future or that adequate controls will be effective in preventing fraud. If we fail to maintain an effective system of internal controls,
`we may not be able to accurately report our financial results or prevent fraud. Any failures in the effectiveness of our internal controls could have
`a material adverse effect on our financial condition or operating results or cause us to fail to meet reporting obligation s.
`26
`
`Source: DESTINATION MATERNITY CORP., 10-K, 12/14/2009 I Powered by Intelligize
`
`DMC Exhibit 2040_026
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`Item 1B.
`
`Unresolved Staff Comments
`
`Not applicable.
`
`Properties
`Item 2.
`We own our principal executive offices and distribution facility, which is located at 456 North Fifth Street, Philadelphia, Pennsylvania,
`subject to a mortgage under the terms of which we owe approximately $2.4 million as of September 30, 2009. This facility consists of approximately
`318,000 square feet. of which approximately 45,000 square feet is dedicated to office space and the remaining square footage is used for finished
`goods warel1o11sir1g ar1d distribution. O11 August 26, 2002, we entered ir1to a ten-year lease for a facility located at 2001 Kitty Hawk Avenue,
`Philadelphia, Pennsylvania in the Philadelphia Naval Business Center. The area leased at this facility, which we use for some finished goods
`warehousing and distribution, as well as raw material cutting and warehousing, consists of approximately 64,000 square feet of space. To facilitate
`our store growth in Canada, we entered into a three-year lease commencing November 1, 2002 for approximately 12,000 square feet of finished
`goods warehouse and distribution space in Mississauga, Ontario in Canada. Since this time. we have renewed this lease in Canada on multiple
`occasions and it currently expires on October 31, 2010. From time to time we may also utilize third-party warehousing services in the Philadelphia,
`Pennsylvania area when we have increased storage requirements. These services essentially operate on a month-to-month basis. We believe that
`these facilities will be adequate to support our anticipated distribution needs for the near term and, potentially, longer. In the event we need
`additional space to meet our future distribution needs, We believe that such space would be readily available. Our facilities are subject to state and
`local regulations that range from building codes to health and safety regulations.
`We lease our store premises for initial terms averaging from five to ten years. Certain leases allow us to terminate or reduce our obligations at
`specified points in time in the event that the applicable store does not achieve a specified sales volume. Some of our store leases also provide for
`contingent payments based on sales volume, cscalations of the base rent, as well as increases i11 operating costs, marketing costs and real estate
`taxes.
`
`As of September 30, 2009, the following numbers of store leases are set to expire as listed in the table below. We do 11ot expect the expiration
`of any leases to have a material adverse impact on our business or operations.
`
`Fiscal Year Leases Expire
`2010
`2011
`2012
`2013
`201 4
`2015 and later
`Total
`
`Number
`of
`Stores
`104
`108
`85
`119
`1 36
`172
`724
`
`In addition to the stores we operate, we have arrangements with department and specialty stores, including Sears, Kmart, Macy’s.
`Rloomingdale’s, Rahies“R”Us, P>oscov’s and Gordmans to operate maternity apparel departments in their stores. These leased departments
`typically involve the lease partner collecting all ofthe revenue from the leased department. The revenue is remitted to us, less a fixed percentage of
`the net sales earned by the lease partner as stipulated in the agreement. We provide at least some amount of staffing for each of the leased
`departments. with the amount varying depending on the specific arrangement. Generally, under each of our leased department agreements, our
`lease partner has the right to terminate any or all of our rights to operate our leased departments in their stores subject to varying notice
`requirements.
`
`Legal Proceedings
`Item 3.
`From time to time, we are named as a defendant in legal actions arising from our normal business activities. Litigation is inherently
`unpredictable and altl1o11gh tl1e an1o11r1t of any liability that could arise with respect to currently pending actions car1r1ot be accurately predicted,
`we do not believe that the resolution of any pending action will have a material adverse effect on our financial position or liquidity.
`
`Submission of Matters to a Vote of Security Holders
`Item 4.
`Not applicable.
`
`27
`
`Source: DESTIN»'¥l'ION F¢’|AT'ERNITY CORR, 10~K, 12714-/2009 | Powered by Intelligize
`
`DMC Exhibit 2040_O27
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`Item 5.
`Our co111111o11 stock is traded o11 tl1e Nasdaq Global Market u11der the sy111bol “DEST.” Prior to Dece111ber 9, 2008 (before giving effect to our
`corporate name change), our common stock traded under the symbol “MWRK.” The following table sets forth for the periods indicated below the
`reported high and low sales prices of our common stock as reported on the Nasdaq Global Market:
`
`PART H.
`
`Fiscal Year Ended September 30, 2009:
`Quaiter ended Dece111ber 31, 2008
`Quarter ended March 31, 2009
`Quarter ended June 30, 2009
`Quarter ended September 30. 2009
`Fiscal Year Ended September 30, 2008:
`Quarter ended l_)ecember 31, 2007
`Quarter ended March 31, 2008
`Quarter ended June 30, 2008
`Quarter ended September 30, 2008
`
`EL
`
`Low
`
`$14.68
`8.70
`18.13
`23.74
`
`$19.78
`20.21
`18.46
`17.39
`
`$ 5.72
`4.42
`5.92
`16.30
`
`$14.93
`14.58
`8.97
`9.61
`
`As of December 1, 2009, there were 1,288 holders ofrecord and 949 estimated beneficial holders of our common stock.
`We have not paid any cash dividends on our common stock since our initial public offering and do not anticipate paying cash dividends on
`our common stock in the foreseeable future. In addition, the terms of our senior secured Term Loan B due March 13. 2013 (the “Term Loan”) and
`our credit facility restrict our ability to declare or pay dividends on o11r connnon stock. Even if we were not restricted under the terms of our Term
`Loan or our credit facility from being able to pay dividends, any future payment of dividends would still be at the discretion ofour Board of
`Directors and would be based upon certain restrictive financial covenants, earnings, capital requirements and our financial condition, among other
`factors. at the time any such dividend is considered.
`Under our Amended a11d Restated 2005 Equity Incentive Plan (the “2005 Plan”), awards 111ay be granted i11 the forn1 of options, stock
`appreciation rights, restricted stock or restricted stock units. Up to 700,000 shares of our common stock may be issued in respect of awards under
`our 2005 Plan, with no more than 350,000 of those shares permitted to be issued in respect of restricted stock or restricted stock units granted
`under the 2005 Plan.
`
`111 July 2008, our Board of Directors approved a program to repurchase up to $7.0 million of our outstanding common stock. Under the
`program, we may repurchase shares from time to time through solicited or unsolicited transactions in the open market or in negotiated or other
`transactions. The program will be i11 effect until the end of July 2010. There were no repurchases of common stock under the program during fiscal
`2009 or fiscal 2008.
`
`28
`
`Source: DESTINATION lw’|AT'ERNITY CORR,
`
`lO~K, 12/'14/2009 | Powered by Intelligize
`
`DMC Exhibit 2040_028
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`Stock Price Performance Graph
`The graph below compares the cumulative total stockholder return on our Common Stock for the period from September 30, 2004 to
`Scptcmbcr 30, 2009, with thc cumulativc total return ofthc Standard & Poor’s 500 Index and thc Standard & Poor’s Apparcl Rctail Indcx. Thc
`comparison assumes $100 was invested on September 30, 2004 in our Common Stock and in each of tlie foregoing indices and assumes
`reinvestment of dividends.
`
`COMPARISON OF 5 YEAR CI IMI ILATIVE TOTAL RETI IRN*
`Among Destination Maternity Corporation, The S&P 500 Index
`And The S&P Apparel Retail Index
`
`5350
`
`5300 -
`
`S2504
`
`5150‘
`
`S200 -
`
`S50—
`
`9-'04
`
`QIDE
`
`QIDB
`
`QED?
`
`9.108
`
`EH19
`
`
`
`*
`
`S100 invested on 9/30/04 in stock or index—inc1uding reinvestment of dividends. Fiscal year ending September 30.
`2004
`2005
`2006
`2007
`
`2008
`
`2009
`
`Destination Maternity Corporation
`S&P 500
`S&P Apparel Retail Index
`
`515 100.00
`$ 100.00
`519 100.00
`
`68.97
`$
`$ 112.25
`$
`95.12
`
`$ 331.86
`$ 124.36
`$ 120.21
`
`$ 128.76
`$ 144.81
`$ 119.08
`
`95.72
`$
`$ 112.99
`515 104.08
`
`$ 125.03
`$ 105.18
`$ 120.43
`
`29
`
`Source: DESTINATION MATERNITY CORR, 10-K, 12/14/2009 I Powered by Intelligize
`
`
`
`DMC Exhibit 2040_O29
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`Selected Consolidated Financial and Operating Data
`Item 6.
`The following tables set forth selected consolidated statement of operations data, operating data, other financial data, and balance sheet
`data as of and for thc pcriods i11dicatcd. The sclcctcd consolidatcd statcmcnt ofopcrations and balancc shcct data for cach of thc five fiscal ycars
`presented below are derived from our consolidated financial statements. Yo11 should read this information in conjunction with ‘‘Management’s
`Discussion and Analysis of Financial Condition and Results ofOperations” and our consolidated financial statements and the related notes
`included elsewhere in this report.
`
`Statement of Operations Data:
`Net sales
`Cost of goods sold
`Gross profit
`Selling, general and administrative expenses
`Storc closing, assct impairmcnt and assct disposal cxpcnscs
`Restructuring and other charges
`Goodwill impainneiit expense
`Operating income (loss)
`Interest expense, net
`Loss on extinguishment of debt
`Income (loss) before income taxes
`Income tax provision (benefit)
`Net income (loss)
`Net income (loss) per share—Basic
`Average shares outstanding—Basic
`
`Net income (loss) per sha1‘e—Diluted
`Average shares outstanding—Diluted
`
`30
`
`2009
`
`$531,251
`248,476
`282,775
`259,552
`536
`1,557
`50,389
`(29,259)
`4,720
`123
`(34,102)
`6,580
`$(40,682)
`$
`6.79)
`5,992
`
`$
`
`6.79)
`5,992
`
`Year Ended September 30,
`2006
`2007
`2008
`(in thousands, except per share amounts)
`
`$564,602
`281,561
`283,041
`271,592
`2,916
`3,461
`—
`5,072
`6,974
`97
`(1,999)
`(610)
`$ (1,389)
`$
`(0.23)
`5,924
`
`$
`
`(0.23)
`5,924
`
`$581,371
`281,155
`300,216
`279,719
`1,788
`—
`—
`18,709
`9,848
`9,423
`(562)
`(169)
`(393)
`0.07)
`5,802
`
`$
`$
`
`$
`
`0.07)
`5,802
`
`$602,744
`288,082
`314,662
`279,713
`4,621
`—
`—
`30,328
`14,534
`873
`14,921
`5,819
`9,102
`1.70
`5,348
`
`$
`$
`
`$
`
`1.63
`5,591
`
`2005
`
`$561,627
`277,453
`284,174
`264,652
`5.284
`—
`—
`14,238
`15,293
`—
`(1,055)
`(880)
`(175)
`0.03)
`5.242
`
`$
`$
`
`$
`
`0.03)
`5,242
`
`Source: DESTINATION MATERNITY CORR,
`
`‘lO~K, 1.?/'14/2089 | Powered by Intelligize
`
`DMC Exhibit 2040_O30
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`Operating Data:
`Comparable store sales increase (decrease) (1)
`Average net sales per gross square foot (2)
`Average net sales per store (2)
`Gross store square footage at period end (3)
`Gross retail location square footage at period
`end (4)
`Number of retail locations at period end:
`Motherhood Maternity stores
`Mimi Maternity stores (5)
`A Pea in the Pod stores (5)
`Destination Maternity stores ( 5)
`Total stores
`Leased departments
`Total retail locations
`Other Financial Data:
`Adjusted l:'B1'1'DA (6)(7)
`Ratio of total debt to Adjusted EBITDA
`Ratio 0fAdjusteL1 EBITDA to i11terest expense,
`net
`Adjusted EBITDA before restructuring and
`other charges (6)(7)
`Adjusted net income (loss), before goodwill
`irnpainnent expense (7)
`Adjusted net income (loss) per share—Diluted,
`before goodwill impairment expense (7)
`Adjusted net income (loss), before goodwill
`impairment expense, restructuring and other
`charges, and loss on extinguishment of debt
`(7)
`Adjusted net income (loss) per share—Diluted,
`before goodwill impairment expense,
`restructuring and other charges, and loss 011
`extinguishment of debt (7)
`Cash flows provided by operating activities
`Cash flows used in investing activities
`Cash flows used in financing activities
`Capital expenditures
`Balance Sheet Data (at end of period):
`Cash and cash equivalents
`Short-term investments
`Working capital
`"otal assets
`"otal debt
`Net debt (7)(8)
`Stockholders’ equity
`
`2009
`
`Year Ended September 30,
`2006
`2007
`2008
`(unaudited; in thousands, except operating data,
`ratios and per share amounts)
`
`2005
`
`(4.3)%
`290
`$
`$ 573,000
`1,462,000
`
`0.2%
`302
`$
`$ 588,000
`1,492,000
`
`(4.8)%
`299
`$
`$ 568,000
`1,498,000
`
`4.3%
`305
`$
`$ 570,000
`1,532,000
`
`(2.5)%
`295
`S
`S 534,000
`1,579,000
`
`1,619,000
`
`1,623,000
`
`1,811,000
`
`1,819,000
`
`1,874,000
`
`591
`—
`67
`66
`724
`360
`1,084
`
`38,762
`1.5x
`
`8.2x
`
`40,191
`
`9,707
`
`1.60
`
`15
`
`616
`89
`30
`19
`754
`278
`1,032
`
`25,501
`3.1x
`
`3.7x
`
`28,717
`
`(1,389)
`
`(0.23)
`
`$
`
`635
`100
`32
`14
`781
`795
`1,576
`
`38,579
`2.4x
`
`3.9x
`
`38,579
`
`(393)
`
`(0.07)
`
`$
`
`659
`106
`33
`12
`810
`731
`1,541
`
`51,715
`2.3x
`
`3.6x
`
`51,715
`
`9,102
`
`1.63
`
`S
`
`690
`117
`37
`8
`852
`739
`1,591
`
`33,906
`3.8x
`
`2.2x
`
`33,906
`
`(175)
`
`(0.03)
`
`10,751
`
`843
`
`5,355
`
`9,635
`
`(175)
`
`1.77
`42,525
`(12,455)
`(21,592)
`(12,639)
`
`20,626
`—
`50,580
`196.007
`57,409
`36,783
`49,800
`
`0.14
`27,822
`(13,347)
`(12,457)
`(15,688)
`
`$
`
`12,148
`
`$
`
`61,611
`256.248
`78,646
`66,498
`89,468
`
`31
`
`0.87
`27,398
`(8,112)
`(28,060)
`(15,444)
`
`10,130
`—
`64,923
`275.925
`93,180
`83,050
`88,523
`
`1.72
`42,413
`(23,166)
`(3,380)
`(13,933)
`
`18,904
`9,425
`83,772
`287.736
`118,349
`90,020
`80,700
`
`$
`
`(0.03)
`7,324
`(11,414)
`(1,340)
`(17,644)
`
`S
`
`3,037
`—
`71,228
`273.317
`128,856
`125,819
`63,328
`
`15
`
`$
`
`Source: DESTINATION MATERNITY CORR,
`
`‘10~K, 12/'14/2089 | Powered by Intelligize
`
`DMC Exhibit 2040_O31
`
`Target v. DMC
`|PR2013-00530, 531, 532, 533
`
`
`
`(l)
`
`Comparable store sales figures represent sales at retail locations that have been in operation by us for at least twelve full months at the
`beginning of tl1e period for which s11cl1 data is presented. As 11sed i11 this Form l0-K, “retail locations” include stores a11d leased
`departments, and exclude locations where Kohl’