New
York, New York (November 13, 2002)—Movie Star, Inc. (AMEX: MSI), today
announced improved financial results for the fiscal first quarter ended
September 30, 2002.
Net
sales for the fiscal 2003 first quarter advanced six percent to $15,780,000
from $14,911,000 for last year’s comparable quarter. Income from continuing
operations before income taxes surged more than 160 percent, reaching
$1,116,000 from the $428,000 reported in fiscal 2002's first quarter. Net
income also rose sharply, increasing to $670,000, or $0.04 per diluted share,
from $301,000, or $0.02 per diluted share, for 2002’s opening three months.
Gross margin expanded to 29.7 percent from 27.8 percent last year, reflecting a
combination of improved efficiencies and a more favorable product mix.
Commenting
on the first-quarter achievement, President and Chief Executive Officer Mel
Knigin said: “Although consumer confidence and spending struggle to step up the
weakest pace in nine years, the progress we have made in creating a financially
strong, well-controlled and streamlined operation is producing tangible
benefits.”
He
continued: “As part of our commitment to maintaining the highest customer
service levels possible, we are currently incurring increased expenses related
to air shipments of goods during the West Coast dock strike, which will
modestly restrain fiscal second-quarter gross margins. Assuming an agreement is
reached and the flow of goods returns to normal, we would not expect the impact
to be beyond the second quarter.
“We
are gratified to have been able to increase both gross margin and profitability
during the year’s opening three months in this still very challenging economic
environment. On the other hand, while topline growth is improving, it is still
not increasing as rapidly as we would like. Looking ahead to the balance of the
year, we believe our Company is very well positioned to capitalize on a rebound
in the soft goods market, and while the exact timing is difficult to predict,
current order trends are encouraging. Therefore, we continue to expect
significant year-over-year sales and earnings growth for fiscal 2003,” Knigin
concluded.
MOVIE
STAR, INC. produces and sells ladies sleepwear, robes, leisurewear, loungewear,
panties and daywear.
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 Matthew
J. Dennis, CFA
(212)
684-3400 (216)
464-6400
MOVIE STAR, INC.
CONSOLIDATED
CONDENSED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, Except Per-Share
Amounts)
|
Three Months Ended |
|
September
30, |
|
2002 2001 |
|
Net sales |
$15,780 |
$14,911
|
|
Cost of sales |
11,094 |
10,761 |
|
Gross profit |
4,686 |
4,150 |
|
|
|
|
|
Selling, general and administrative expenses |
3,469 |
3,450 |
|
|
|
|
|
Operating
income from continuing operations |
1,217 |
700 |
|
|
|
|
|
Interest income |
(1) |
(1) |
|
Interest expense |
102 |
273 |
|
|
|
|
|
Income from continuing operations before
income taxes |
1,116 |
428 |
|
Income taxes |
446 |
170 |
|
|
|
|
|
Income from
continuing operations |
670 |
258 |
|
|
|
|
|
Income from discontinued operations, net
of income taxes |
- |
43 |
|
|
|
|
|
Net income |
$ 670 |
$ 301 |
|
|
|
|
|
BASIC NET
INCOME PER SHARE |
|
|
|
From continuing
operations |
$.04 |
$.02 |
|
From discontinued
operations |
- |
- |
|
Net income per
share |
$.04 |
$.02 |
|
|
|
|
|
DILUTED NET
INCOME PER SHARE |
|
|
|
From continuing
operations |
$.04 |
$.02 |
|
From discontinued
operations |
- |
- |
|
Net income per
share |
$.04 |
$.02 |
|
|
|
|
|
Basic weighted average number of shares outstanding |
15,085 |
15,085 |
|
Diluted weighted average number of shares outstanding |
15,085 |
15,137 |
|
|
|
|
MOVIE
STAR, INC.
(In Thousands, Except Number of Shares)
|
September
30, |
June 30, |
|
2002 (Unaudited) |
2002* |
Assets
|
Current Assets |
|
|
|
Cash |
$ 194 |
$ 215 |
|
Receivables,
net |
11,964 |
7,001 |
|
Inventory |
9,020 |
8,797 |
|
Prepaid
expenses and other current assets |
1,763 |
2,044 |
|
Total
current assets |
22,941 |
18,057 |
|
|
|
|
|
Property, plant and equipment, net |
1,335 |
1,350 |
|
Other assets |
3,032 |
2,999 |
|
|
|
|
|
Total
assets |
$27,308 |
$22,406 |
Liabilities and Shareholders’ Equity
|
Current Liabilities |
|
|
|
Notes payable |
$ 8,681 |
$ 4,129 |
|
Current maturity of long-term liabilities |
41 |
40 |
|
Accounts
payable and accrued expenses |
4,026 |
4,359 |
|
Total
current liabilities |
12,748 |
8,528 |
|
|
|
|
|
Long-term liabilities |
266 |
254 |
|
|
|
|
|
Commitments and Contingencies |
- |
- |
|
|
|
|
|
Shareholders’ equity |
|
|
|
Common stock, $.01 par value–authorized 30,000,000
shares; |
|
|
|
issued 17,102,000 shares in September
2002, June 2002 and September 2001 |
171 |
171 |
|
Additional
paid-in capital |
4,147 |
4,147 |
|
Retained
earnings |
13,594 |
12,924 |
|
|
17,912 |
17,242 |
|
|
|
|
|
Less: Treasury
stock, at cost – 2,017,000 shares |
3,618 |
3,618 |
|
|
|
|
|
Total
shareholders’ equity |
14,294 |
13,624 |
|
|
|
|
|
Total liabilities and shareholders’ equity |
$27,308 |
$22,406 |
|
|
|
|
* Derived from audited financial statements.