New York, New York (February 13, 2007)—Movie Star, Inc. (AMEX: MSI) (“Company”)
today announced financial results for the fiscal 2007 second quarter and first
half ended December 31, 2006.
Net
sales for the fiscal 2007 second quarter were $17,524,000, compared to last
year’s $17,867,000. Gross margin, as a
percentage of sales, increased five percentage points to 34.6% for the fiscal
2007 second quarter from 29.6% in the fiscal 2006 second quarter. Pre-tax income for the fiscal 2007 second
quarter was $963,000, compared to $1,017,000 in the same quarter last
year. The fiscal 2007 second quarter
included a $496,000 gain on the sale of property, plant and equipment and an $803,000
expense for merger related fees associated with the Company’s previously
announced merger with
Net
sales for the first half of fiscal 2007 increased to $36,214,000 from $31,504,000
in the same period last year. For the first
half of fiscal 2007, the gross margin increased 4.3 percentage points to 32.8%
from 28.5% in the comparable period of fiscal 2006. The Company recorded net income of $944,000,
or $0.06 per diluted share, versus $239,000, or $0.02 per diluted share, in the
comparable period of fiscal 2006. Net
income for the first half of fiscal 2007 included $1,342,000 in fees associated
with the Company’s previously announced merger with Frederick’s of Hollywood
and the aforementioned gain on the sale of property, plant and equipment, which
is primarily the result of the sale of the Company’s former distribution center
in Pennsylvania.
“We expect our second half sales to compare favorably to last
year’s second half as a result of our strong open order position, which was
approximately $25,000,000 at December 31, 2006, compared with $17,000,000 at
December 31, 2005. We are continuing our commitment to managing our costs and
working to improve upon last year’s second half gross margins. Further, we are excited about the
recently announced plan to merge with
MOVIE
STAR, INC. designs, manufactures (through independent contractors), imports,
markets and distributes women’s intimate apparel, including sleepwear, robes,
leisurewear and daywear, to mass merchandisers, specialty and department
stores, discount retailers, national and regional chains and direct mail
catalog marketers throughout the United States.
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; failure to
realize the merger’s anticipated synergies; approval of the transactions by
Movie Star’s shareholders and satisfaction of various other conditions to the
closing of the merger contemplated by the merger agreement; and the other risks
that are described from time to time in Movie Star’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, |
|
2006 (Unaudited) |
2006*
|
2005 (Unaudited) |
Assets
|
Current Assets |
|
|
|
|
Cash |
$ 90
|
$ 203 |
$ 272
|
|
Receivables, net |
10,090 |
6,074 |
10,377 |
|
Inventory |
10,168 |
8,981 |
7,233 |
|
Deferred income taxes |
1,728 |
1,914 |
2,125 |
|
Prepaid expenses and other current assets |
244 |
801 |
696 |
|
Total current assets |
22,320 |
17,973 |
20,703 |
|
|
|
|
|
|
Property, plant and equipment,
net |
1,028 |
838 |
686 |
|
Deferred income taxes |
2,915 |
3,296 |
2,473 |
|
Goodwill |
537 |
537 |
537 |
|
Assets held for sale |
- |
174 |
174 |
|
Other assets |
453 |
403 |
439 |
|
|
|
|
|
|
Total assets |
$27,253 |
$23,221 |
$25,012 |
Liabilities and Shareholders’ Equity
|
Current Liabilities |
|
|
|
|
Note payable |
$ 7,651 |
$ 4,955 |
$ 7,018 |
|
Current maturities of capital lease
obligations |
55 |
- |
- |
|
Accounts payable and other current liabilities |
4,074 |
4,086 |
2,633 |
|
Total current liabilities |
11,780 |
9,041 |
9,651 |
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities |
434 |
398 |
387 |
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
Common stock, $.01 par value – authorized
30,000,000 shares; |
|
|
|
|
issued 17,960,000 shares at December 31,
2006, 17,755,000 shares at June 30, 2006 and 17,703,000 shares at December 31, 2005 |
180 |
178 |
177 |
|
Additional paid-in capital |
5,180 |
4,834 |
4,789 |
|
Retained earnings |
13,305 |
12,361 |
13,600 |
|
Accumulated other comprehensive (loss)
income |
(8) |
27 |
26 |
|
Treasury stock, at cost—2,017,000 shares |
(3,618) |
(3,618) |
(3,618) |
|
Total shareholders’ equity |
15,039 |
13,782 |
14,974 |
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$27,253 |
$23,221 |
$25,012 |
|
|
|
|
|
* 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,
2006 2005
2006 2005
|
Net sales |
$17,524 |
$17,867 |
|
$36,214 |
$31,504 |
|
Cost of sales |
11,462 |
12,586 |
|
24,329 |
22,510 |
|
Gross profit |
6,062 |
5,281 |
|
11,885 |
8,994 |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
4,580 |
4,097 |
|
9,067 |
8,312 |
|
Merger related fees |
803 |
- |
|
1,342 |
- |
|
Gain on sale of property, plant and equipment |
(496) |
- |
|
(496) |
- |
|
|
|
|
|
|
|
|
Income from operations |
1,175 |
1,184 |
|
1,972 |
682 |
|
|
|
|
|
|
|
|
Interest expense |
212 |
167 |
|
399 |
284 |
|
|
|
|
|
|
|
|
Income before provision for income taxes |
963 |
1,017 |
|
1,573 |
398 |
|
Provision for income taxes |
385 |
407 |
|
629 |
159 |
|
|
|
|
|
|
|
|
Net income |
$ 578 |
$ 610 |
|
$ 944 |
$ 239 |
|
|
|
|
|
|
|
|
BASIC NET INCOME PER SHARE |
$.04 |
$.04 |
|
$.06 |
$.02 |
|
|
|
|
|
|
|
|
DILUTED NET INCOME PER
SHARE |
$.04 |
$.04 |
|
$.06 |
$.02 |
|
|
|
|
|
|
|
|
Basic weighted average number of shares outstanding |
15,810 |
15,684 |
|
15,786 |
15,672 |
|
Diluted weighted average number of shares outstanding |
16,232 |
15,698 |
|
16,090 |
15,760 |
|
|
|
|
|
|
|