1115 Broadway, New
York , NY 10010
Movie Star, Inc.,
Reports Fiscal 2006
Third-Quarter and
Nine-Months Financial Results
For the fiscal 2006
third quarter, net sales decreased to $11,940,000 from last year’s
$14,659,000. Gross margin, as a
percentage of sales, increased 350 basis points to 27.2% for the fiscal 2006
third quarter compared with 23.7% in the fiscal 2005 third quarter. Pre-tax income of $462,000 was recorded for
the 2006 third quarter, as compared with a pre-tax loss of $1,269,000 in the same
quarter last year. In the current year’s
third quarter, we recorded a non-recurring gain of $1,424,000 from the
insurance settlement related to the damage caused by Hurricane Katrina to the
Poplarville, Mississippi distribution center.
The Company recorded net income of $276,000, or $0.02 per diluted share, for the fiscal 2006
third quarter, as compared to a net loss of $761,000, or a loss of $0.05 per
share, for the third quarter of fiscal 2005.
Net sales for the fiscal
2006 nine months decreased to $43,444,000 from $50,479,000 in the same period a
year ago. For the fiscal 2006 nine
months, the gross margin increased 380 basis points to 28.2% from 24.4% in the
comparable fiscal 2005 period. Pre-tax
income of $860,000 was recorded for the 2006 nine months, as compared with a
pre-tax loss of $1,777,000 in the period last year. Included in the pre-tax income for the 2006
nine-month period was the previously mentioned $1,424,000 insurance gain. The Company recorded net income of $515,000,
or $0.03 per diluted share, versus a net loss of $1,066,000, or a loss of $0.07
per share, in the fiscal 2005 comparable period.
Mel Knigin, President and Chief Executive Officer, stated:
“Fiscal 2006 has been a difficult year and, while the present quarter will
remain challenging, our business outlook is improving. Based on orders received to date and the
positive reaction we are getting from our customers on our current products, we
expect the financial results for the fall season, July through December, to significantly
improve over the prior year.”
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)
|
March 31, |
June 30, |
March 31, |
|
2006 (Unaudited) |
2005*
|
2005 (Unaudited) |
Assets
|
Current Assets |
|
|
|
|
Cash |
$ 134 |
$ 178 |
$ 435 |
|
Receivables, net |
9,529 |
5,973 |
9,278 |
|
Inventory |
6,431 |
11,730 |
7,132 |
|
Deferred income taxes |
1,782 |
2,260 |
1,781 |
|
Prepaid expenses and other current assets |
2,249 |
372 |
812 |
|
Total current assets |
20,125 |
20,513 |
19,438 |
|
|
|
|
|
|
Property, plant and equipment, net |
727 |
755 |
1,012 |
|
Deferred income taxes |
2,606 |
2,473 |
1,542 |
|
Goodwill |
537 |
537 |
537 |
|
Assets held for sale |
174 |
174 |
- |
|
Other assets |
425 |
455 |
445 |
|
|
|
|
|
|
Total assets |
$24,594 |
$24,907 |
$22,974 |
Liabilities and Shareholders’ Equity
|
Current Liabilities |
|
|
|
|
Note payable |
$ 6,626 |
$ 4,794 |
$ 3,763 |
|
Accounts payable and accrued expenses |
2,321 |
5,046 |
2,109 |
|
Total current liabilities |
8,947 |
9,840 |
5,872 |
|
|
|
|
|
|
|
|
|
|
|
Long-term liabilities |
384 |
390 |
388 |
|
|
|
|
|
|
Commitments and Contingencies |
- |
- |
- |
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
Common stock, $.01 par value – authorized 30,000,000 shares; |
|
|
|
|
issued 17,736,000 shares at March 31, 2006, 17,657,000 shares at June 30, 2005 and 17,637,000 shares at March 31, 2005 |
177 |
177 |
176 |
|
Additional paid-in capital |
4,808 |
4,747 |
4,729 |
|
Retained earnings |
13,876 |
13,361 |
15,417 |
|
Accumulated other comprehensive
income |
20 |
10 |
10 |
|
Treasury stock, at cost—2,017,000
shares |
(3,618) |
(3,618) |
(3,618) |
|
Total shareholders’ equity |
15,263 |
14,677 |
16,714 |
|
|
|
|
|
|
Total liabilities and
shareholders’ equity |
$24,594 |
$24,907 |
$22,974 |
|
|
|
|
|
* Derived from
audited financial statements.
MOVIE STAR, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In
Thousands, Except Per Share Amounts)
Three Months Ended Nine
Months Ended
March 31, March 31,
2006 2005
2006
2005
|
Net sales |
$11,940 |
$14,659 |
|
$43,444 |
$50,479 |
|
Cost of sales |
8,689 |
11,186 |
|
31,199 |
38,146 |
|
Gross profit |
3,251 |
3,473 |
|
12,245 |
12,333 |
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
4,114 |
4,666 |
|
12,426 |
13,877 |
|
Insurance recovery |
(1,424) |
- |
|
(1,424) |
- |
|
|
|
|
|
|
|
|
Income (loss) from operations |
561 |
(1,193) |
|
1,243 |
(1,544) |
|
|
|
|
|
|
|
|
Interest expense |
99 |
76 |
|
383 |
233 |
|
|
|
|
|
|
|
|
Income (loss) before provision for (benefit from)
income taxes |
462 |
(1,269) |
|
860 |
(1,777) |
|
Provision for (benefit from) income taxes |
186 |
(508) |
|
345 |
(711) |
|
|
|
|
|
|
|
|
Net income (loss) |
$ 276 |
$ (761) |
|
$ 515 |
$ (1,066) |
|
|
|
|
|
|
|
|
BASIC NET INCOME (LOSS) PER
SHARE |
$.02 |
$(.05) |
|
$.03 |
$(.07) |
|
|
|
|
|
|
|
|
DILUTED NET INCOME (LOSS) PER
SHARE |
$.02 |
$(.05) |
|
$.03 |
$(.07) |
|
|
|
|
|
|
|
|
Basic weighted average number of shares outstanding |
15,717 |
15,620 |
|
15,687 |
15,619 |
|
Diluted weighted average number of shares outstanding |
15,829 |
15,620 |
|
15,776 |
15,619 |
|
|
|
|
|
|
|