Destination Maternity Reports Q4 Earnings Higher Than Prior Guidance And Significantly Higher Than Last Year

   Destination Maternity Reports Q4 Earnings Higher Than Prior Guidance And
                     Significantly Higher Than Last Year

- Q4 Fiscal 2012 GAAP Diluted EPS of $0.39, higher than prior guidance of
$0.17-$0.28 provided on July 26, 2012, and an increase of 95% over last year's
Q4 GAAP Diluted EPS of $0.20. On October 9, 2012, the Company had announced
that it expected its Q4 earnings to exceed the top end of its prior guidance
range.

- Full year Fiscal 2012 GAAP Diluted EPS of $1.46, an increase compared to
prior EPS guidance of $1.24-$1.35 from July 26, 2012, and a decrease from
Fiscal 2011 full year GAAP Diluted EPS of $1.75

- Full year Fiscal 2012 free cash flow (defined as net cash provided by
operating activities minus capital expenditures) of $33.4 million, a
significant increase from Fiscal 2011 free cash flow of $9.2 million

- Projected full year Fiscal 2013 GAAP Diluted EPS of $1.56-$1.74, a projected
increase of between 7% and 19% over Fiscal 2012 full year GAAP Diluted EPS of
$1.46

- Projected full year Fiscal 2013 free cash flow of between $20 and $31
million

PR Newswire

PHILADELPHIA, Nov. 15, 2012

PHILADELPHIA, Nov. 15, 2012 /PRNewswire/ --Destination Maternity Corporation
(Nasdaq: DEST), the world's leading maternity apparel retailer, today
announced operating results for the fourth quarter and full year fiscal 2012,
which ended September 30, 2012. The Company's diluted earnings per share for
its fourth quarter and full year fiscal 2012 were higher than the top end of
its July 26, 2012 earnings guidance. On November 14, 2012 the Company
announced that its Board of Directors declared a regular quarterly cash
dividend of $0.175 per share payable December 28, 2012.

Fourth Quarter Fiscal 2012 Financial Results

  oGAAP net income for the fourth quarter of fiscal 2012 was $5.2 million, an
    increase of 93% compared to GAAP net income of $2.7 million for the fourth
    quarter of fiscal 2011. GAAP diluted earnings per share for the fourth
    quarter of fiscal 2012 was $0.39, an increase of 95% compared to $0.20 for
    the fourth quarter of fiscal 2011. This fourth quarter fiscal 2012 GAAP
    diluted earnings per share performance was higher than the top end of the
    Company's prior guidance of $0.17-$0.28 provided in its July 26, 2012
    press release.
  oAdjusted EBITDA was $12.7 million for the fourth quarter of fiscal 2012, a
    42% increase compared to the $8.9 million of Adjusted EBITDA for the
    fourth quarter of fiscal 2011. Adjusted EBITDA is defined in the
    financial tables at the end of this press release.
  oNet sales for the fourth quarter of fiscal 2012 decreased 0.7% to $128.5
    million from $129.4 million for the fourth quarter of fiscal 2011. The
    decrease in sales for the fourth quarter of fiscal 2012 compared to fiscal
    2011 resulted primarily from decreased sales related to the Company's
    continued efforts to close underperforming stores and decreased sales from
    the Company's licensed relationship, largely offset by an increase in
    comparable sales. The net sales of $128.5 million for the fourth quarter
    were toward the high end of the Company's guidance range of $125.5 to
    $130.0 million provided in July 2012.
  oComparable sales (which include Internet sales) for the fourth quarter of
    fiscal 2012 increased 2.7% versus a comparable sales decrease of 1.7% for
    the fourth quarter of fiscal 2011. The comparable sales increase of 2.7%
    during the fourth quarter of fiscal 2012 was near the high end of the
    Company's guidance range for fourth quarter comparable sales of between a
    decrease of 1% and an increase of 3%.

Full Year Fiscal 2012 Financial Results

  oGAAP net income for fiscal 2012 was $19.4 million, a decrease compared to
    GAAP net income of $23.0 million for fiscal 2011. GAAP diluted earnings
    per share for fiscal 2012 was $1.46, a decrease compared to $1.75 for
    fiscal 2011.
  oGAAP net income for fiscal 2011 included a reduction of state income tax
    expense, net of federal tax benefit, of $0.9 million, or $0.07 per share
    (diluted), related to settlements of uncertain income tax positions.
  oAdjusted EBITDA was $49.9 million for fiscal 2012, an 8% decrease compared
    to $54.4 million of Adjusted EBITDA for fiscal 2011.
  oNet sales for fiscal 2012 decreased 0.7% to $541.5 million from $545.4
    million for fiscal 2011. Comparable sales for fiscal 2012 decreased 0.3%
    versus a comparable sales increase of 0.1% for fiscal 2011. The Company
    estimates that the cannibalization impact of the Macy's® leased department
    expansion in February 2011 hurt both its fiscal 2011 and fiscal 2012
    comparable sales by approximately 1 percentage point.
  oFree cash flow (defined as net cash provided by operating activities minus
    capital expenditures) for fiscal 2012 was $33.4 million, a significant
    increase from Fiscal 2011 free cash flow of $9.2 million.

Financing and Related Activities

  oOn November 1, 2012, the Company announced that it entered into a new $61
    million revolving credit facility with Wells Fargo Bank, N.A., which will
    mature on November 1, 2017. The new credit facility replaced the
    Company's $55 million revolving credit facility with Bank of America,
    N.A., which was due to mature on January 13, 2013.
  oOn November 1, 2012, the Company repaid the remaining $13.4 million
    principal amount of its senior secured Term Loan, which was due to mature
    on March 13, 2013.
  oOn November 14, 2012, the Company announced that its Board of Directors
    declared a regular quarterly cash dividend of $0.175 per share, payable
    December 28, 2012 to stockholders of record at the close of business on
    December 7, 2012.

Retail Locations

The table below summarizes store opening and closing activity for the fourth
quarter and full year of fiscal 2012 and 2011, as well as the Company's store,
total retail location and total international franchised location count at the
end of each fiscal period. The decrease in leased department locations at the
end of September 2012 versus September 2011 predominantly reflects the closure
of the Company's 291 remaining leased departments within Kmart® locations in
October 2011. Kmart represented only a small portion of the overall sales
generated by the Company's leased department relationship with Sears® and
Kmart through the Company's agreement with Sears Holdings Corporation. The
Company continues to operate leased departments in Sears stores throughout the
United States. As of September 30, 2012, the Company operated 515 leased
department locations in Sears stores.

                                       Fourth Quarter Ended  Year Ended
                                       September 30,         September 30,
                                       2012         2011     2012      2011
Store Openings (1)
Total                                    4           4        8         12
Multi-Brand Store Openings               3           1        6         7
Store Closings (1)
Total                                    15          9        41        52
Closings Related to Multi-Brand Store    5           2        12        11
Openings
Period End Retail Location Count (1)
Stores                                   625         658      625       658
Leased Department Locations              1,383       1,694    1,383     1,694
Total Retail Locations (1)               2,008       2,352    2,008     2,352

(1) Excludes international franchised locations.

                                          Fourth Quarter Ended   Year Ended
                                          September 30,          September 30,
                                          2012         2011      2012     2011
International Franchised Location
Openings
Stores                                      -            3         2       7
Shop-in-Shop Locations                      18           6         54      29
Total International Franchised Location     18           9         56      36
Openings
International Franchised Location
Closings
Stores                                      -            -         1       -
Shop-in-Shop Locations                      -            -         2       1
Total International Franchised Location     -            -         3       1
Closings
Period End International Franchised
Location Count
Stores                                      16           15        16      15
Shop-in-Shop Locations                      103          51        103     51
Total International Franchised Locations    119          66        119     66

In connection with the Company's new broad-based partnership with Bed Bath &
Beyond Inc. and its subsidiary, Buy Buy Baby, Inc. (which was announced in May
2012), beginning in late October 2012 the Company has begun to open leased
departments in select buybuy BABY® stores, and the Company discontinued
operation of its 124 remaining leased departments in Babies"R"Us in late
October 2012.

Commentary

Ed Krell, Chief Executive Officer of Destination Maternity Corporation, noted,
"Fiscal 2012 was a year filled with significant challenges and achievements
for Destination Maternity. While we continued to face a challenging sales
environment and a continued reduction of births in the United States, we
generated strong positive earnings (second in Company history only to our
record earnings results of fiscal 2011) and generated significant free cash
flow, while increasing our investment and talent in our key areas of focus and
growth: merchandising, marketing, web and international. In addition, we
continued to strengthen our partnership businesses, completing the first year
of our significant nationwide expansion with Macy's, and entering into an
exciting and broad-based partnership with Bed Bath & Beyond Inc. and its
subsidiary, Buy Buy Baby, Inc. We used our strong free cash flow to generate
shareholder value, both through continued significant debt repayment and
continuing to return funds to our stockholders via a meaningful regular
quarterly cash dividend. However, we are disappointed that we did not fully
achieve our sales and earnings goals for fiscal 2012, and that we generated
lower earnings than our record earnings of a year ago.

"While we are disappointed with our comparable sales decrease of 0.3% for the
full year fiscal 2012, which was hurt by approximately 1 percentage point by
cannibalization from our Macy's leased department expansion, we are pleased
with the strong improvement of our sales performance for the fourth quarter of
fiscal 2012, which was driven by strong sales of our Fall 2012 merchandise
assortments. Our fourth quarter comparable sales increased 2.7%, near the
high end of our guidance range for comparable sales of between a decrease of
1% and an increase of 3%.

"Our strong fourth quarter sales performance, combined with our increased
gross margin and continued tight management of expenses, enabled us to deliver
very strong earnings performance for the fourth quarter. Our GAAP diluted
earnings of $0.39 per share for the fourth quarter were nearly double last
year's fourth quarter earnings of $0.20 per share, and exceeded the top end of
our prior earnings guidance range of $0.17 to $0.28 per share that we provided
in our July 26, 2012 press release.

"Our key focus continues to be improving our sales performance through
initiatives to enhance our merchandise assortments, merchandise presentation,
store environment and customer experience. While we recognize the challenging
macroeconomic environment, we remain focused on the things that we can
control, not on external factors that we cannot control. During fiscal 2012,
we made many changes to drive improvements in our merchandise assortments and
the way these assortments are presented in store, and we are pleased with the
improved sales trend we have seen in the Fall product selling season. We are
cautiously optimistic that we will continue to see the results of our efforts
in an improved sales trend during the coming year and beyond."

Financing and Related Activities

"During fiscal 2012 we made $15.0 million in prepayments on our Term Loan and
continued to return funds to our stockholders with our $0.70 per share
annualized dividend rate ($0.175 per share quarterly cash dividend), after
having initiated this quarterly cash dividend in the second quarter of fiscal
2011. On November 1, 2012, we entered into a new five-year$61 million
revolving credit facility to replace our $55 million revolving credit
facility, which was due to mature on January 13, 2013. In addition,
simultaneous with entering into the new credit facility, we repaid the
remaining $13.4 million principal amount of our senior secured Term Loan,
which was due to mature on March 13, 2013.

"The repayment of our Term Loan completes a dramatic decrease in our financial
leverage over the past several years. Giving effect to this Term Loan
repayment, over the past six years, our total debt has decreased from $118
million to $2 million, and our annual interest expense has decreased from $15
million to less than $1 million. In addition, our new credit facility
provides us with continued significant financial and operating flexibility as
we continue to execute on our strategic plan."

Guidance for Fiscal 2013

"Looking forward, we are confident that we can continue to improve our sales
performance and position our Company for continued future growth, by
continuing to enhance our merchandise assortments, merchandise presentation,
store environment and customer experience, and continuing to focus on our
strategic plan as summarized in our five key goals and strategic objectives
discussed later under 'Company Strategy.'

"Our financial guidance for the full year fiscal 2013 is as follows:

  oNet sales in the $536 to $549 million range, representing a projected
    sales change of between a decrease of 1.0% and an increase of 1.4% versus
    fiscal 2012 net sales of $541.5 million. This sales guidance range is
    based on a projected comparable sales increase of between 1.0% and 3.5%. 
  oGross margin for fiscal 2013 is expected to increase between 50 and 90
    basis points versus fiscal 2012, with greater improved year-over-year
    gross margin projected for the first half of the fiscal year.
  oTotal selling, general and administrative expenses (SG&A) are planned to
    be flat to modestly higher than fiscal 2012 in dollar terms and slightly
    higher than fiscal 2012 as a percentage of net sales. The projected SG&A
    expense for the full year reflects increased marketing expenses, additions
    of talent to drive sales, and increased variable incentive compensation
    expense, as well as inflationary expense increases, partially offset by
    continued tight expense controls and additional cost reductions.
  oOperating income in the $34.5 to $38.5 million range, a projected increase
    of between 4% and 16% compared to fiscal 2012 operating income of $33.1
    million.
  oGAAP diluted earnings per share of between $1.56 and $1.74 per share for
    fiscal 2013, a projected increase of between 7% and 19% compared to
    earnings of $1.46 per share (diluted) for fiscal 2012.
  oAdjusted EBITDA in the $51.5 to $55.5 million range, a projected increase
    of between 3% and 11% compared to the fiscal 2012 Adjusted EBITDA of $49.9
    million.
  oOpen 14 to 20 new stores during the year, including 7 to 10 new
    multi-brand Destination Maternity stores, and close approximately 34 to 51
    stores, with 14 to 20 of these planned store closings related to openings
    of new Destination Maternity stores.
  oCapital expenditures planned at between $15 and $20 million compared to
    fiscal 2012 capital expenditures of $9.3 million. After deducting
    projected tenant construction allowance payments to us from store
    landlords, the Company expects net cash outlay for capital projects to be
    between $12 million and $17 million, compared to $6.1 million in fiscal
    2012. Our planned capital expenditures include significant investments
    for store enhancements, as well as continued investments in systems,
    distribution center efficiency projects, and new stores.
  oInventory at fiscal 2013 year end planned to be approximately 4% to 8%
    lower than fiscal 2012 year end.
  oGiven these assumptions, the Company plans to generate free cash flow
    (defined as net cash provided by operating activities minus capital
    expenditures) of between $20 and $31 million for the full year fiscal
    2013, a projected decrease from fiscal 2012 free cash flow of $33.4
    million due to higher planned capital expenditures. Based on the
    Company's current quarterly dividend rate of $0.175 per share, the
    dividend will use approximately $9.4 million of cash flow for fiscal 2012.

"Our financial guidance for the first quarter of fiscal 2013 is as follows:

  oNet sales in the $132.5 to $136.5 million range.
  oA projected comparable sales change of between flat and an increase of
    3.0% on a reported basis. We estimate that our reported comparable sales
    for the first quarter of fiscal 2013 will be hurt by approximately 1
    percentage point due to having one less Saturday in the first quarter of
    fiscal 2013 compared to the first quarter of fiscal 2012.
  oGAAP diluted earnings per common share of between $0.25 and $0.32 per
    share, a significant increase versus the GAAP diluted earnings per share
    of $0.17 for the first quarter of fiscal 2012."

Company Strategy

Mr. Krell added, "As we plan and execute our business for both this year and
beyond, we continue to be guided by our five key goals and strategic
objectives:

1.Be a profitable global leader in the maternity apparel business, treating
    all our partners and stakeholders with respect and fairness.
2.Increase the profitability of our U.S. business, focusing on the
    following:

     a.Increase comparable sales, through continued improvement of
         merchandise assortments, merchandise presentation and customer
         experience, providing a more shoppable store environment for our
         customers, and through enhanced marketing and advertising.
     b.Reduce our expenditures and continue to be more efficient in
         operating our business—streamline, simplify and focus.
     c.Continue to expand our multi-brand Destination Maternity store chain
         where ROI hurdles are met, with the goal of operating fewer but
         larger stores over time; and
     d.Continue to close underperforming stores.

3.In addition to achieving increased comparable sales, we aim to grow our
    sales where we can do so profitably, including the following areas of
    focus:

     a.International expansion.
     b.Potential growth of our leased department and licensed relationships.
     c.Increased utilization of the Internet to drive sales, targeting both
         increased direct Internet sales and enhanced web marketing
         initiatives to drive store sales.
     d.Selective new store openings and relocations in the U.S. and Canada;
         and
     e.Continued focus on enhancing our overall customer relationship,
         including our marketing partnership programs.

4.Focus on generating free cash flow to drive increased shareholder value.
5.Maintain and intensify our primary focus on delivering great maternity
    apparel product and service in each of our brands and store formats, to
    serve the maternity apparel customer like no one else can."

Mr. Krell concluded, "Although we are proud of what we have accomplished in
the past four years to significantly improve our Company's profitability and
financial position, even in the face of a challenging sales environment, we
have not been satisfied with our sales results or our current year earnings
results. While we recognize that over the past four years we have faced the
dual challenges of a deep recession followed by a weak recovery, as well as a
9% decrease in annual births in the United States since 2007, we remain
focused on driving improvement in our sales performance through initiatives to
enhance our merchandise assortments, merchandise presentation, store
environment and customer experience. We are confident in our ability to
continue to manage our business through this uncertain consumer environment,
to continue to improve our sales performance, and to continue to make progress
towards our key corporate goals."

Conference Call Information

As announced previously, the Company will hold a conference call today at 9:00
a.m. Eastern Time, regarding the Company's fourth quarter and full year fiscal
2012 earnings and future financial guidance. You can participate in this
conference call by calling (888) 873-4896 in the United States and Canada or
(617) 213-8850 outside of the United States and Canada. Please call ten
minutes prior to 9:00 a.m. Eastern Time. The conference call (listen only)
will also be available on the investor section of our website at
http://investor.destinationmaternity.com. The passcode for the conference
call is "34655158." In the event that you are unable to participate in the
call, a replay will be available through Thursday, November 29, 2012 by
calling (888) 286-8010 in the United States and Canada or (617) 801-6888
outside of the United States and Canada. The passcode for the replay is
"76080475."

Destination Maternity Corporation is the world's largest designer and retailer
of maternity apparel. In the United States and Canada, as of September 30,
2012, Destination Maternity operates 2,008 retail locations, including 625
stores, predominantly under the tradenames Motherhood Maternity®, A Pea in the
Pod®, and Destination Maternity®, and 1,383 leased department locations, and
sells on the web through its DestinationMaternity.com and brand-specific
websites. Destination Maternity also distributes its Oh Baby by Motherhood®
collection through a licensed arrangement at over 1,100 Kohl's® stores
throughout the United States and on Kohls.com. In addition, Destination
Maternity is expanding internationally and has exclusive store franchise and
product supply relationships in India, the Middle East and South Korea. As of
September 30, 2012, Destination Maternity has 119 international franchised
locations, including 103 shop-in-shop locations and 16 Destination Maternity
branded stores.

The Company cautions that any forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) contained in
this press release or made from time to time by management of the Company,
including those regarding earnings, net sales, comparable sales, other results
of operations, liquidity and financial condition, and various business
initiatives, involve risks and uncertainties, and are subject to change based
on various important factors. The following factors, among others, in some
cases have affected and in the future could affect the Company's financial
performance and actual results and could cause actual results to differ
materially from those expressed or implied in any such forward-looking
statements: the continuation of the economic recovery of the retail industry
in general and of apparel purchases in particular, our ability to successfully
manage our various business initiatives, the success of our international
business and its expansion, our ability to successfully manage and retain our
leased department and licensed relationships and marketing partnerships,
future sales trends in our existing retail locations and through the Internet,
unusual weather patterns, changes in consumer spending patterns, raw material
price increases, overall economic conditions and other factors affecting
consumer confidence, demographics and other macroeconomic factors that may
impact the level of spending for maternity apparel, expense savings
initiatives, our ability to anticipate and respond to fashion trends and
consumer preferences, unanticipated fluctuations in our operating results, the
impact of competition and fluctuations in the price, availability and quality
of raw materials and contracted products, availability of suitable store
locations, continued availability of capital and financing, our ability to
hire and develop senior management and sales associates, our ability to
develop and source merchandise, our ability to receive production from foreign
sources on a timely basis, potential stock repurchases, the continuation of
the regular quarterly cash dividend, the trading liquidity of our common
stock, changes in market interest rates, war or acts of terrorism and other
factors set forth in the Company's periodic filings with the Securities and
Exchange Commission, or in materials incorporated therein by reference.

DESTINATION MATERNITY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

(in thousands, except percentages and per share data)

(unaudited)
                               Fourth Quarter Ended    Year Ended

                               September 30,           September 30,
                               2012        2011        2012        2011
Net sales                      $ 128,487   $ 129,442   $ 541,476   $ 545,394
Cost of goods sold               56,899      60,602      250,765     248,497
 Gross profit                71,588      68,840      290,711     296,897
 Gross margin                55.7    %   53.2    %   53.7    %   54.4    %
Selling, general and
administrative
 expenses (SG&A)             62,656      63,793      255,623     257,421
 SG&A as a percentage of     48.8    %   49.3    %   47.2    %   47.2    %
net sales
Store closing, asset
impairment and asset
 disposal expenses           333         217         1,983       1,039
Restructuring and other          —           —           —           193
charges
 Operating income            8,599       4,830       33,105      38,244
Interest expense, net            161         461         1,215       2,233
Loss on extinguishment of debt   —           —           22          37
 Income before income        8,438       4,369       31,868      35,974
taxes
Income tax provision             3,249       1,682       12,496      12,986
 Net income                $ 5,189     $ 2,687     $ 19,372    $ 22,988
Net income per share – basic   $ 0.39      $ 0.21      $ 1.48      $ 1.79
Average shares outstanding –     13,153      13,014      13,096      12,820
basic
Net income per share – diluted $ 0.39      $ 0.20      $ 1.46      $ 1.75
Average shares outstanding –     13,294      13,179      13,267      13,120
diluted
Supplemental information:
Net income, as reported        $ 5,189     $ 2,687     $ 19,372    $ 22,988
Add: stock-based compensation    365         367         1,472       1,467
expense, net of tax
Add: restructuring and other     —           —           —           120
charges, net of tax
Add: loss on extinguishment of   —           —           14          23
debt, net of tax
Adjusted net income, before
stock-based 

 compensation expense,     $ 5,554     $ 3,054     $ 20,858    $ 24,598
restructuring and other 

 charges, and loss on
extinguishment of debt
Adjusted net income per share
– diluted, before

 stock-based compensation
expense, restructuring         $ 0.42      $ 0.23      $ 1.57      $ 1.87

 and other charges, and
loss on extinguishment of

 debt

DESTINATION MATERNITY CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)
                                                 September 30,  September30,

                                                 2012           2011
ASSETS
Current assets:
Cash and cash equivalents                        $   22,376     $   15,285
Trade receivables, net                               13,197         11,015
Inventories                                          88,754         90,366
Deferred income taxes                                7,557          7,572
Prepaid expenses and other current assets            4,220          6,797
Total current assets                                 136,104        131,035
Property, plant and equipment, net                   51,078         55,854
Other assets                                         12,462         11,883
 Total assets                                 $   199,644    $   198,772
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit borrowings                        $   —          $   —
Current portion of long-term debt                    15,257         2,915
Accounts payable                                     21,987         18,456
Accrued expenses and other current liabilities       35,544         33,680
Total current liabilities                            72,788         55,051
Long-term debt                                       —              28,427
Deferred rent and other non-current liabilities      21,884         22,599
Total liabilities                                    94,672         106,077
Stockholders' equity                                 104,972        92,695
Total liabilities and stockholders' equity       $   199,644    $   198,772
SELECTED CONSOLIDATED BALANCE SHEET DATA
Total debt                                       $   15,257     $   31,342
Net cash (debt) (1)                              $   7,119      $   (16,057)
(1) Net cash (debt) represents cash and cash equivalents minus total debt.

DESTINATION MATERNITY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)
                                                      Year Ended September 30,
                                                      2012          2011
Operating Activities
Net income                                            $  19,372     $ 22,988
Adjustments to reconcile net income to net cash
provided by

 operating activities:
Depreciation and amortization                            12,445       12,769
Stock-based compensation expense                         2,357        2,344
Loss on impairment of long-lived assets                  1,876        768
Loss on disposal of assets                               115          270
Loss on extinguishment of debt                           22           37
Deferred income tax (benefit) provision                  (1,378)      2,679
Amortization of deferred financing costs                 105          170
Changes in assets and liabilities:
Decrease (increase) in:
Trade receivables                                        (2,188)      (680)
Inventories                                              1,611        (9,632)
Prepaid expenses and other current assets                2,577        (1,634)
Other non-current assets                                 (12)         (26)
Increase (decrease) in:
Accounts payable, accrued expenses and other current     6,201        (5,525)
liabilities
Deferred rent and other non-current liabilities          (406)        (3,085)
Net cash provided by operating activities                42,697       21,443
Investing Activities
Capital expenditures                                     (9,256)      (12,270)
Additions to intangible assets                           (265)        (313)
Withdrawal from grantor trust                            —            1,504
Net cash used in investing activities                    (9,521)      (11,079)
Financing Activities
Decrease in cash overdraft                               (401)        (1,147)
Repayment of long-term debt                              (16,085)     (13,819)
Deferred financing costs paid                            (61)         (26)
Withholding taxes on stock-based compensation paid
in connection                                            (597)        (2,786)

 with repurchase of common stock
Cash dividends paid                                      (9,325)      (6,901)
Proceeds from exercise of stock options                  107          2,285
Excess tax benefit from exercise of stock options
and restricted stock                                     289          2,695

 vesting
Net cash used in financing activities                    (26,073)     (19,699)
Effect of exchange rate changes on cash and cash         (12)         (13)
equivalents
Net Increase (Decrease) in Cash and Cash Equivalents     7,091        (9,348)
Cash and Cash Equivalents, Beginning of Year             15,285       24,633
Cash and Cash Equivalents, End of Year                $  22,376     $ 15,285

DESTINATION MATERNITY CORPORATION AND SUBSIDIARIES

Supplemental Financial Information



Reconciliation of Net Income to Adjusted EBITDA^(1)

and Operating Income Margin to Adjusted EBITDA Margin

(in thousands, except percentages)

(unaudited)
                        Fourth Quarter Ended        Year Ended

                        September 30,               September 30,
                        2012          2011          2012          2011
Net income              $  5,189      $  2,687      $  19,372     $  22,988
Add: income tax            3,249         1,682         12,496        12,986
provision
Add: interest              161           461           1,215         2,233
expense, net
Add: loss on
extinguishment of          —             —             22            37
debt
Operating income           8,599         4,830         33,105        38,244
Add: depreciation
and amortization           3,106         3,214         12,445        12,769
expense
Add: loss on
impairment of              307           238           1,876         768
long-lived assets
Add: loss on               50            24            115           270
disposal of assets
Add: stock-based           588           577           2,357         2,344
compensation expense
Adjusted EBITDA (1)        12,650        8,883         49,898        54,395
Net sales               $  128,487    $  129,442    $  541,476    $  545,394
Operating income
margin (operating
income
                           6.7%          3.7%          6.1%          7.0%
 as a
percentage of net
sales)
Adjusted EBITDA
margin (adjusted
                           9.8%          6.9%          9.2%          10.0%
 EBITDA as a
percentage of net
sales)
(1) Adjusted EBITDA represents operating income before deduction for the
following non-cash charges: (i) depreciation and amortization expense; (ii)
loss on impairment of tangible and intangible assets; (iii) loss on disposal
of assets; and (iv) stock-based compensation expense.



Reconciliation of Net Income Per Share - Diluted

to Adjusted Net Income Per Share – Diluted,

Before Stock-Based Compensation Expense and

Loss on Extinguishment of Debt

(unaudited)
                                Projected for the           Actual for the
                                Year Ending                 Year Ended
                              September 30, 2013         September 30, 2012
Net income per share –          $     1.56 to               $      1.46
diluted (1)                           1.74
Add: per share effect of
stock-based compensation              0.13                         0.11
expense
Add: per share effect of
loss on extinguishment of             0.00                         0.00
debt
Adjusted net income per
share - diluted, before
stock-based 
                                      1.69 to
 compensation expense       $     1.87                  $      1.57
and loss on extinguishment
of

 debt (1)
(1) Projected net income and projected adjusted net income per share –
diluted for the year ending September 30, 2013 are based on approximately
13.4 million projected average diluted shares outstanding.

Reconciliation of Net Income Per Share - Diluted

to Adjusted Net Income Per Share – Diluted,

Before Stock-Based Compensation Expense

and Loss on Extinguishment of Debt

(unaudited)
                              Projected for the           Actual for the
                              First Quarter Ending        First Quarter Ended
                              December 31, 2012 ^         December 31, 2011
Net income per share –        $       0.25 to 0.32        $      0.17
diluted (1)
Add: per share effect of
stock-based compensation              0.03                       0.03
expense
Add: per share effect of
loss on extinguishment of             0.00                       0.00
debt
Adjusted net income per
share - diluted, before
stock-based 

 compensation expense     $       0.28 to 0.35        $      0.20
and loss on extinguishment
of

 debt (1)
(1) Projected net income and projected adjusted net income per share –
diluted for the first quarter ending December 31, 2012 are based on
approximately 13.3 million projected average diluted shares outstanding.
Reconciliation of Net Income to Adjusted EBITDA

(in millions, unaudited)
                              Projected for the           Actual for the
                              Year Ending                 Year Ended
                              September 30, 2013          September 30, 2012
Net income                    $       21.0 to 23.4        $      19.4
Add: income tax provision             13.1 to 14.7               12.5
Add: interest expense, net            0.4                        1.2
Add: loss on                          0.0                        0.0
extinguishment of debt
Operating income                      34.5 to 38.5               33.1
Add: depreciation and                 13.0                       12.4
amortization expense
Add: loss on impairment of
long-lived assets and loss
on                                    1.2                        2.0

 disposal of assets
Add: stock-based                      2.8                        2.4
compensation expense
Adjusted EBITDA               $       51.5 to 55.5        $      49.9



SOURCE Destination Maternity Corporation

Website: http://www.destinationmaternity.com
Contact: Judd P. Tirnauer, Executive Vice President & Chief Financial Officer,
+1-215-873-2278
 
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