1115 Broadway,
FOR
IMMEDIATE RELEASE:
Movie Star, Inc. Reports Fiscal 2006 First Quarter Financial Results
Gross
profit for the quarter declined to 27.2% from 29.9% as a result of a better
product mix in the prior year, additional costs due to hurricane Katrina and
higher markdowns in the current year as compared to the prior year. For the quarter, the Company recorded a net
loss of $371,000, or $0.02 per share, compared with a net loss of $230,000, or
$0.01 per share, in the first quarter of fiscal 2005.
Mel
Knigin, President and Chief Executive Officer, stated: “We are optimistic that
fiscal 2006’s financial results will compare favorably with last year, even
though the first quarter was adversely impacted by hurricane Katrina.”
“As
we stated in a previous news release, the hurricane forced us to close our
major distribution center from August 29th to September 6th
and operate with a reduced staff through the middle of October. The immediate actions we took to control this
problem have reduced the negative impact of this unfortunate event. Had it not been for the hurricane, sales
would have been higher and costs would have been lower in the quarter and the
Company’s financial results would have been better.”
Mr.
Knigin concluded, “For the second quarter of fiscal 2006, sales will be lower
than the same period last year. However,
in reviewing the orders for the second quarter, we expect an overall higher
gross margin percentage to favorably impact the results for the first half of
2006. As a result, the gross margin
percentage will be higher for the six months ending December 31, 2005 compared
to the same period last 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 Data)
|
September 30, |
June 30, |
September 30, |
|
2005
(Unaudited) |
2005* |
2004
(Unaudited) |
Assets
|
Current
Assets |
|
|
|
|
Cash |
$
164 |
$
178 |
$
354 |
|
Receivables, net |
7,930 |
5,973 |
10,642 |
|
Inventory |
11,052 |
11,730 |
14,381 |
|
Deferred income taxes |
2,470 |
2,260 |
2,702 |
|
Prepaid expenses and other current assets |
710 |
372 |
631 |
|
Total current assets |
22,326 |
20,513 |
28,710 |
|
|
|
|
|
|
Property,
plant and equipment, net |
726 |
755 |
1,093 |
|
Deferred
income taxes |
2,473 |
2,473 |
148 |
|
Goodwill |
537 |
537 |
537 |
|
Assets
held for sale |
174 |
174 |
- |
|
Other
assets |
458 |
455 |
440 |
|
|
|
|
|
|
Total assets |
$26,694 |
$24,907 |
$30,928 |
Liabilities and Shareholders’ Equity
|
Current Liabilities |
|
|
|
|
Note payable |
$ 8,298 |
$
4,794 |
$10,142 |
|
Accounts payable and other current
liabilities |
3,553 |
5,046 |
2,864 |
|
Total current liabilities |
11,851 |
9,840 |
13,006 |
|
|
|
|
|
|
Long-term
liabilities |
501 |
390 |
379 |
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
Common stock, $.01 par value – authorized 30,000,000
shares; |
|
|
|
|
issued 17,679,000 shares in September 2005, 17,657,000 in June 2005 and 17,637,000 in September 2004 |
177 |
177 |
176 |
|
Additional paid-in capital |
4,768 |
4,747 |
4,729 |
|
Retained earnings |
12,990 |
13,361 |
16,253 |
|
Accumulated other comprehensive income |
25 |
10 |
3 |
|
Less treasury stock, at cost—2,017,000 shares |
(3,618) |
(3,618) |
(3,618) |
|
Total shareholders’ equity |
14,342 |
14,677 |
17,543 |
|
|
|
|
|
|
Total
liabilities and shareholders’ equity |
$26,694 |
$24,907 |
$30,928 |
|
|
|
|
|
* Derived from audited financial statements.
.
MOVIE STAR, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In
Thousands, Except Per Share Amounts)
|
Three
Months Ended |
|
September
30, |
|
2005 2004 |
|
Net sales |
$13,637 |
$12,830 |
|
Cost of sales |
9,924 |
9,000 |
|
Gross profit |
3,713 |
3,830 |
|
|
|
|
|
Selling, general and administrative
expenses |
4,215 |
4,181 |
|
|
|
|
|
Loss from operations |
(502) |
(351) |
|
|
|
|
|
Interest expense |
117 |
33 |
|
|
|
|
|
Loss before
benefit from income taxes |
(619) |
(384) |
|
Income tax benefit |
(248) |
(154) |
|
|
|
|
|
Net loss |
$
(371) |
$
(230) |
|
|
|
|
|
BASIC NET LOSS PER SHARE |
$(.02) |
$(.01) |
|
|
|
|
|
DILUTED NET LOSS PER SHARE |
$(.02) |
$(.01) |
|
|
|
|
|
Basic weighted average number of
shares outstanding |
15,660 |
15,617 |
|
Diluted weighted average number of
shares outstanding |
15,660 |
15,617 |
|
|
|
|