New
York, New York (November 13, 2000)—Movie Star, Inc., (AMEX:MSI) today reported
continuing improvement in its profitability for the fiscal 2001 first quarter,
which ended September 30, 2000.
Net income of
$1,270,000, or $0.08 per diluted share, for the first quarter was up 51.7% from
$837,000, or $0.05 per diluted share, a year ago, even though net sales for the
first quarter of fiscal 2001 decreased 3.3% to $18,594,000 from $19,219,000
last year.
“We continue to
benefit from the improvements in manufacturing efficiency we have implemented
and we have now been profitable for five successive quarters,” said Mel Knigin,
Movie Star’s President and Chief Executive Officer. “We continue to see lower sales in the retail stores division,
which resulted primarily from having eight fewer stores in the current year.”
Mr. Knigin
continued, “Gross margin improved to 31.5 % from 27.6 % a year ago, primarily
because we are now manufacturing almost all of our products offshore and we had
fewer closeouts this year as compared to last year.”
First
quarter sales for the Company’s intimate apparel division decreased 1.6% as
compared to the same period last year, while the retail division’s sales were
down $348,000 or 20.6% primarily due to the closing, in the fourth quarter of
2000, of eight of its stores. Gross
margin for the intimate apparel division increased to 31.6% from 27.4% last
year, while the retail division’s gross margin remained the same at 30.5%.
“Our open order
position is strong, bolstering our expectations for a sales increase for the
year,” Mr. Knigin said. “We have
introduced a number of new products for our spring fashion line in order to
help boost sales during the traditionally slower second half of our fiscal
year. Our recently strengthened sales
staff is developing new opportunities, and we expect to start seeing tangible
benefits in our core intimate apparel division this fiscal year. We also expect to expand our sales channels
to include segments of the market that have been beyond our reach because of
high manufacturing costs. We continue
to search for additional offshore sources that will provide us with opportunities
to obtain reliable manufacturing and raw materials at more favorable costs than
our current sources.”
The Company
announced that it has terminated its relationship with First Union Securities,
Inc., which was exploring strategic and financial alternatives
related to the maturity of the Company’s long-term debt and to maximizing
shareholder value. The Company will
continue to internally explore the options available to it and implement the
best possible alternative for its shareholders related to the maturity of its
8% Senior Notes and 12.875% Subordinated Debentures, which mature on September
1, 2001 and October 1, 2001, respectively.
MOVIE STAR, INC. produces and sells ladies
sleepwear, robes, leisurewear, loungewear, panties and daywear and also
operates 20 retail outlet stores.
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; 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 Steve
Warcholak
(212) 684-3400
(216) 464-6400
2000
MOVIE STAR, INC.
CONSOLIDATED CONDENSED STATEMENTS OF
INCOME
(Unaudited)
(In Thousands, Except Per Share Amounts)
|
|
Three Months Ended |
|
|
||||
|
|
September 30, |
|
|
||||
|
|
2000 |
|
1999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$18,594 |
|
$19,219 |
|
|
|
|
|
Cost of sales |
12,738 |
|
13,909 |
|
|
|
|
|
Gross profit |
5,856 |
|
5,310 |
|
|
|
|
|
Selling, general and administrative expenses |
4,127 |
|
4,029 |
|
|
|
|
|
Income from operations |
1,729 |
|
1,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on purchases of subordinated debentures |
- |
|
(114) |
|
|
|
|
|
Interest income |
(1) |
|
(18) |
|
|
|
|
|
Interest expense |
434 |
|
559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
1,296 |
|
854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
26 |
|
17 |
|
|
|
|
|
Net
income |
$
1,270 |
|
$
837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per share |
$.09 |
|
$.06 |
|
|
|
|
|
Diluted net income per share |
$.08 |
|
$.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of shares
outstanding |
14,897 |
|
14,880 |
|
|
|
|
|
Diluted weighted average number of shares
outstanding |
15,419 |
|
16,354 |
|
|
|
|
MOVIE STAR, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands, Except Number of Shares)
|
September 30, |
|
June
30, |
|
2000 |
|
2000 |
|
(Unaudited) |
|
|
ASSETS
|
Current
Assets |
|
|
|
|
Cash |
$
360 |
|
$
712 |
|
Receivables, net |
13,904 |
|
7,960 |
|
Inventory |
14,975 |
|
14,643 |
|
Deferred income taxes |
1,706 |
|
1,706 |
|
Prepaid expenses and other current assets |
232 |
|
437 |
|
Total current assets |
31,177 |
|
25,458 |
|
|
|
|
|
|
Property,
plant and equipment, net |
3,046 |
|
3,247 |
|
Other
assets |
222 |
|
619 |
|
Deferred
income taxes |
2,303 |
|
2,303 |
|
|
|
|
|
|
Total assets |
$36,748 |
|
$31,627 |
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
Current
Liabilities |
|
|
|
|
Notes payable |
$
6,708 |
|
$
1,690 |
|
Current maturities of long-term debt and
capital lease obligations |
7,722 |
|
83 |
|
Accounts payable and accrued expenses |
5,296 |
|
6,432 |
|
Total current liabilities |
19,726 |
|
8,205 |
|
|
|
|
|
|
Long-term
debt |
4,460 |
|
12,130 |
|
|
|
|
|
|
Commitments
and Contingencies |
— |
|
— |
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
Common
stock $.01 par value – authorized
30,000,000 shares, |
169 |
|
169 |
|
Additional paid-in capital |
4,078 |
|
4,078 |
|
Retained earnings |
11,933 |
|
10,663 |
|
|
16,180 |
|
14,910 |
|
|
|
|
|
|
Less: Treasury stock, at cost – 2,017,000
shares |
3,618 |
|
3,618 |
|
Total shareholders’ equity |
12,562 |
|
11,292 |
|
|
|
|
|
|
Total
liabilities and shareholders’ equity |
$36,748 |
|
$31,627 |