New York, New York (February 13, 2006)—Movie Star, Inc. (AMEX: MSI), today announced financial results for the fiscal 2006 second quarter and first half ended December 31, 2005.
As expected, net sales
decreased for the fiscal 2006 second quarter to $17,867,000 from last year’s
$22,990,000. This reduction in sales was
due to the shipment of a $7,150,000 low margin order in the prior year’s second
quarter which the Company declined to bid on in the current year. Gross margin as a percentage of sales
increased 770 basis points to 29.6% for the fiscal 2006 second quarter compared
with 21.9% in the fiscal 2005 second quarter.
Pre-tax income was $1,017,000 in the current quarter as compared to a
pre-tax loss of $124,000 in the same quarter last year. The Company recorded net income of $610,000,
or $0.04 per diluted share, for the fiscal 2006 second quarter, as compared to
a net loss of $75,000, or a loss of less than $0.01 per share, for the second
quarter of fiscal 2005. The increase in
earnings for the fiscal 2006 second quarter was primarily the result of higher
gross margins and lower selling, general and administrative expenses.
Net sales for the fiscal
2006 first half decreased to $31,504,000 from $35,820,000 in the same period a
year ago. For the fiscal 2006 first
half, the gross margin increased 380 basis points to 28.5% from 24.7% in the
fiscal 2005 comparable period. The
Company recorded net income of $239,000, or $0.02 per diluted share, versus a
net loss of $305,000, or a loss of $0.02 per share, in the fiscal 2005
comparable period.
Mel Knigin, President and Chief Executive Officer, stated: “We
are pleased that we have returned to profitability in the first half, despite a
number of difficulties brought on by Hurricane Katrina. While business remains challenging for the
remainder of fiscal 2006, the initial indications are very positive for our
business outlook for the first half of fiscal 2007. We worked hard to control costs and focus on
higher margin items, demonstrating our ability to execute our business plan and
financial model.”
MOVIE STAR,
INC. produces and sells ladies apparel, including sleepwear, robes, leisurewear
and daywear. Current
collections include the Cinema Etoile
premium line of intimate apparel and the Movie
Star line of apparel sold as private label programs.
Certain of the matters set forth in this press release are forward-looking and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions and growth in the industry; general economic conditions; addition or loss of significant customers; the loss of key personnel; product development; competition; risks of doing business abroad; foreign government regulations; fluctuations in foreign rates; rising costs for raw materials and the unavailability of sources of supply; the timing of orders booked; and the risk factors listed from time to time in the Company’s SEC reports.
CONTACT: INVESTOR RELATIONS:
Movie Star, Inc. -or- SM Berger & Company, Inc.
Thomas Rende, CFO Stanley Berger
(212) 798-4700 (216)
464-6400
[Tables follow]
MOVIE STAR,
INC.
CONSOLIDATED
CONDENSED BALANCE SHEETS
(In
Thousands, Except Share Information)
|
December 31, |
June 30, |
December 31, |
|
2005 (Unaudited) |
2005*
|
2004 (Unaudited) |
Assets
|
Current Assets |
|
|
|
|
Cash |
$ 272 |
$ 178 |
$ 761 |
|
Receivables, net |
10,377 |
5,973 |
15,435 |
|
Inventory |
7,233 |
11,730 |
9,837 |
|
Deferred income taxes |
2,125 |
2,260 |
2,744 |
|
Prepaid expenses and other current assets |
696 |
372 |
688 |
|
Total current assets |
20,703 |
20,513 |
29,465 |
|
|
|
|
|
|
Property, plant and equipment,
net |
686 |
755 |
1,048 |
|
Deferred income taxes |
2,473 |
2,473 |
148 |
|
Goodwill |
537 |
537 |
537 |
|
Assets held for sale |
174 |
174 |
- |
|
Other assets |
439 |
455 |
457 |
|
|
|
|
|
|
Total assets |
$25,012 |
$24,907 |
$31,655 |
Liabilities and Shareholders’ Equity
|
Current Liabilities |
|
|
|
|
Note payable |
$ 7,018 |
$ 4,794 |
$ 11,460 |
|
Accounts payable and accrued expenses |
2,633 |
5,046 |
2,343 |
|
Total current liabilities |
9,651 |
9,840 |
13,803 |
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities |
387 |
390 |
377 |
|
|
|
|
|
|
Commitments and Contingencies |
- |
- |
- |
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
Common stock, $.01 par value – authorized
30,000,000 shares; |
|
|
|
|
issued 17,703,000 shares at December 31,
2005, 17,657,000 shares at June 30, 2005 and 17,637,000 shares at December 31, 2004 |
177 |
177 |
176 |
|
Additional paid-in capital |
4,789 |
4,747 |
4,729 |
|
Retained earnings |
13,600 |
13,361 |
16,178 |
|
Accumulated other comprehensive income |
26 |
10 |
10 |
|
Treasury stock, at cost—2,017,000 shares |
(3,618) |
(3,618) |
(3,618) |
|
Total shareholders’ equity |
14,974 |
14,677 |
17,475 |
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$25,012 |
$24,907 |
$31,655 |
|
|
|
|
|
* Derived from
audited financial statements.
MOVIE STAR, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In
Thousands, Except Per Share Amounts)
Three Months Ended Six
Months Ended
December 31, December 31,
2005 2004
2005 2004
|
Net sales |
$17,867 |
$22,990 |
|
$31,504 |
$35,820 |
|
Cost of sales |
12,586 |
17,960 |
|
22,510 |
26,960 |
|
Gross profit |
5,281 |
5,030 |
|
8,994 |
8,860 |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
4,097 |
5,030 |
|
8,312 |
9,211 |
|
|
|
|
|
|
|
|
Income (loss) from operations |
1,184 |
- |
|
682 |
(351) |
|
|
|
|
|
|
|
|
Interest expense |
167 |
124 |
|
284 |
157 |
|
|
|
|
|
|
|
|
Income (loss)
before provision for (benefit from) income taxes |
1,017 |
(124) |
|
398 |
(508) |
|
Provision for (benefit from) income taxes |
407 |
(49) |
|
159 |
(203) |
|
|
|
|
|
|
|
|
Net income (loss) |
$ 610 |
$ (75) |
|
$ 239 |
$ (305) |
|
|
|
|
|
|
|
|
BASIC NET INCOME (LOSS) PER
SHARE |
$.04 |
$ - |
|
$.02 |
$(.02) |
|
|
|
|
|
|
|
|
DILUTED NET INCOME (LOSS) PER
SHARE |
$.04 |
$ - |
|
$.02 |
$(.02) |
|
|
|
|
|
|
|
|
Basic weighted average number of shares outstanding |
15,684 |
15,620 |
|
15,672 |
15,619 |
|
Diluted weighted average number of shares outstanding |
15,698 |
15,620 |
|
15,760 |
15,619 |
|
|
|
|
|
|
|