Third-Quarter
EPS Soars on 25% Higher Sales
New York, New York (May 7, 2003)—Movie Star, Inc.
(AMEX: MSI), today announced financial results for the fiscal third quarter and
nine months of 2003, which ended March 31, 2003.
For the fiscal 2003 third quarter, net sales increased
25 percent to $16,934,000 from last year’s $13,528,000. Gross margin expanded to 33.2 percent from
28.0 percent for the comparable quarter.
A fivefold increase in third-quarter operating income before tax to
$1,602,000 compared with last year’s $301,000.
Net income rose 434 percent during the quarter, reaching $961,000 from
the $180,000 reported a year ago.
Earnings per diluted share were $0.06 versus $0.01 in 2002’s fiscal
third quarter.
For the first nine months of fiscal 2003, net sales
from continuing operations increased more than 13 percent to $49,403,000
compared with last fiscal year's $43,649,000.
Gross margin expanded 3.1 percent to 31.5 percent from 28.4 percent in
the comparable period. Operating income
before taxes increased 186 percent to $3,970,000 from $1,388,000 in last year's
comparable period. Net income for the
nine-month period of 2003 nearly tripled, reaching $2,382,000 from $876,000 in
the corresponding period a year ago.
Earnings per diluted share of $0.16 compared with $0.06 for the
prior-year period.
The Company attributes the significant earnings
improvements to fundamental changes instituted over the last few years that
included redirected merchandising, design and sales efforts, reducing costs,
enhancing operating efficiencies and improving its sourcing. Chief Executive Officer Mel Knigin stated:
“We are delighted that we continue to realize the intended benefits of numerous
initiatives implemented over the past few years. The cohesive effort of our talented merchandising, design and
sales team has resulted in an increase in significant programs with certain
customers. Better sourcing as a result
of our shift to complete overseas production substantially enhanced gross
margins. Moreover, consolidating our distribution facilities and reducing debt
and interest expense positioned us to lever the effect of higher sales levels,
culminating in impressive bottom-line growth.”
Knigin continued: "We are proud to report that
the $1,602,000 in pre-tax earnings reported today represents our
best-performing third quarter ever.
Also, due to our current backlog of orders and the current order rates
that we have been experiencing, we are expecting robust year-over-year
comparisons for the final quarter of the year.”
MOVIE STAR, INC., produces and sells ladies sleepwear,
robes, leisurewear, loungewear, panties and daywear.
CONTACT: INVESTOR
RELATIONS:
Movie Star, Inc.
-or- SM Berger & Company, Inc.
Thomas Rende, CFO Matthew
J. Dennis, CFA
(212) 684-3400 (216)
464-6400
MOVIE STAR, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In Thousands, Except
Per-Share Amounts; Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
||||
|
|
March 31, |
|
March 31, |
||||
|
|
2003 |
|
2002 |
|
2003 |
|
2002 |
|
|
|
|
|
|
|
|
|
|
Net
sales |
$16,934 |
|
$13,528 |
|
$49,403 |
|
$43,649 |
|
Cost
of sales |
11,317 |
|
9,747 |
|
33,837 |
|
31,257 |
|
Gross
profit |
5,617 |
|
3,781 |
|
15,566 |
|
12,392 |
|
Selling,
general and administrative expenses |
3,950 |
|
3,365 |
|
11,312 |
|
10,390 |
|
Operating income from continuing |
|
|
|
|
|
|
|
|
operations |
1,667 |
|
416 |
|
4,254 |
|
2,002 |
|
|
|
|
|
|
|
|
|
|
Interest income |
(1) |
|
- |
|
(3) |
|
(2) |
|
Interest
expense |
66 |
|
115 |
|
287 |
|
616 |
|
Income
from continuing operations before income taxes |
1,602 |
|
301 |
|
3,970 |
|
1,388 |
|
Income
taxes |
641 |
|
121 |
|
1,588 |
|
555 |
|
Income
from continuing operations |
961 |
|
180 |
|
2,382 |
|
833 |
|
Income
from discontinued operations, net of income taxes |
- |
|
- |
|
- |
|
43 |
|
Net
income |
$ 961 |
|
$ 180 |
|
$ 2,382 |
|
$ 876 |
|
|
|
|
|
|
|
|
|
|
BASIC
NET INCOME PER SHARE |
|
|
|
|
|
|
|
|
From
continuing operations |
$
.06 |
|
$
.01 |
|
$ .16 |
|
$ .06 |
|
From
discontinued operations |
- |
|
- |
|
- |
|
- |
|
Net
income per share |
$
.06 |
|
$
.01 |
|
$ .16 |
|
$ .06 |
|
|
|
|
|
|
|
|
|
|
DILUTED
NET INCOME PER SHARE |
|
|
|
|
|
|
|
|
From
continuing operations |
$
.06 |
|
$
.01 |
|
$ .16 |
|
$ .06 |
|
From
discontinued operations |
- |
|
- |
|
- |
|
- |
|
Net
income per share |
$
.06 |
|
$
.01 |
|
$ .16 |
|
$ .06 |
|
|
|
|
|
|
|
|
|
|
Basic
weighted average number of shares outstanding |
15,085 |
|
15,085 |
|
15,085 |
|
15,085 |
|
Diluted
weighted average number of shares outstanding |
15,476 |
|
15,087 |
|
15,217 |
|
15,118 |
MOVIE STAR, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands, Except Number of Shares)
|
March 31, |
|
June 30, |
March 31, |
|
2003 (Unaudited) |
|
2002*
|
2002 (Unaudited) |
ASSETS
|
Current Assets |
|
|
|
|
|
Cash |
$ 160 |
|
$ 215 |
$ 258 |
|
Receivables, net |
11,421 |
|
7,001 |
8,035 |
|
Inventory |
11,075 |
|
8,797 |
7,911 |
|
Deferred income taxes |
492 |
|
1,842 |
2,226 |
|
Prepaid expenses and other current assets |
102 |
|
202 |
57 |
|
Total current assets |
23,250 |
|
18,057 |
18,487 |
|
|
|
|
|
|
|
Property, plant and
equipment, net |
1,216 |
|
1,350 |
1,321 |
|
Deferred income taxes |
2,662 |
|
2,662 |
2,660 |
|
Other assets |
354 |
|
337 |
329 |
|
|
|
|
|
|
|
Total assets |
$27,482 |
|
$22,406 |
$22,797 |
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
Current Liabilities |
|
|
|
|
|
Notes payable |
$
6,604 |
|
$ 4,129 |
$ 5,107 |
|
Current maturity of long-term liabilities |
37 |
|
40 |
32
|
|
Accounts payable and accrued expenses |
4,536 |
|
4,359 |
3,458 |
|
Total current liabilities |
11,177 |
|
8,528 |
8,597 |
|
|
|
|
|
|
|
Long-term liabilities |
299 |
|
254 |
247 |
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
Common stock $.01 par value – authorized 30,000,000 shares; issued
17,102,000 shares in March 2003, June 2002 and March 2002 |
171 |
|
171 |
171 |
|
Additional paid-in capital |
4,147 |
|
4,147 |
4,147 |
|
Retained earnings |
15,306 |
|
12,924 |
13,253 |
|
|
19,624 |
|
17,242 |
17,571 |
|
|
|
|
|
|
|
Less: Treasury stock, at cost – 2,017,000
shares |
3,618 |
|
3,618 |
3,618 |
|
Total shareholders’ equity |
16,006 |
|
13,624 |
13,953 |
|
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$27,482 |
|
$22,406 |
$22,797 |
*
Derived from audited financial statements
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.