New
York, New York, (February 12, 2002)—Movie Star, Inc., (AMEX:MSI) today
announced financial results for its fiscal 2002 second quarter and first six
months, which ended December 31, 2001.
Fiscal 2002’s second-quarter net sales declined
to $15,354,000 from $19,880,000 for the corresponding period last year. Second-quarter gross margin declined
slightly to 29.1 percent from 29.5 percent last year. Operating income for the second quarter was $886,000, as compared
to $705,000 last year. Last year’s
second-quarter operating income included a $1,008,000 loss related to the
closing of the Virginia distribution facility.
Second–quarter net income was $395,000, or $0.03 per diluted share,
compared with net income from continuing operations before extraordinary items
of $256,000, or $0.02 per diluted share for fiscal 2001.
“As
anticipated, we did not have robust sales during the critical holiday selling
season,” said Mel Knigin, Movie Star’s President and CEO. “Unusually warm winter weather and a
generally weak economic environment caused sluggish sales, particularly for our
winter apparel products. The decline in
sales volume and market pricing pressure have more than offset the operational
efficiency gains our Company has made over the past 12 months.”
Net earnings from continuing operations before extraordinary items for the six months ended December 31, 2001 were $653,000, or $0.05 per diluted share on sales of $30,317,000, compared with $1,588,000, or $0.11 per diluted share on sales of $37,131,000 for the corresponding period last year. Year-to-date, gross margin declined to 28.4 percent compared with 30.5 percent for the six-month period last year.
“The uncertain economic environment and weaker consumer demand resulting from recent
layoff announcements are likely to extend our soft sales trend, causing lower
year-over-year sales comparisons for our upcoming third and fourth quarters,”
Mr. Knigin continued. “Although we cannot be certain when
stronger consumer demand will return, the fact that some financial analysts
have recently pointed to strength in certain economic indicators gives us
reason to be optimistic that our sales will improve beginning with the first
half of fiscal 2003.
“As
we work through this economic cycle, we are being even more aggressive in
managing our inventory and improving our balance sheet. We will be focused on reducing inventory
with a particular emphasis on eliminating older merchandise. Total debt also declined by over 13 percent
to $8,256,000 from $9,540,000 at December 31, 2000.”
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 Steve
Warcholak
(212) 798-4700 (216)
464-6400
MOVIE STAR, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(In Thousands,
Except Per Share Amounts)
|
|
Three Months Ended December 31, |
|
Six Months Ended December 31, |
||||||
|
|
2001 |
|
2000 |
|
2001 |
|
2000 |
||
|
|
|
|
|
|
|
|
|
||
|
Net sales |
$
15,354 |
|
$
19,880 |
|
$
30,317 |
|
$
37,131 |
||
|
Cost of sales |
10,893 |
|
14,015 |
|
21,706 |
|
5,820 |
||
|
|
Gross Profit |
4,461 |
|
5,865 |
|
8,611 |
|
11,311 |
|
|
Selling, general and administrative expenses |
3,575 |
|
4,152 |
|
7,025 |
|
7,806 |
||
|
Loss on closing of distribution facility |
– |
|
1,008 |
|
– |
|
1,008 |
||
|
|
Operating income from continuing |
|
|
|
|
|
|
|
|
|
|
operations |
886 |
|
705 |
|
1,586 |
|
2,497 |
|
|
|
|
|
|
|
|
|
|
||
|
Interest expense, net |
227 |
|
444 |
|
499 |
|
877 |
||
|
|
Income from continuing operations before |
|
|
|
|
|
|
|
|
|
|
income taxes and extraordinary gain |
659 |
|
261 |
|
1,087 |
|
1,620 |
|
|
Income taxes |
264 |
|
5 |
|
434 |
|
32 |
||
|
|
Income from continuing operations before |
|
|
|
|
|
|
|
|
|
|
extraordinary gain |
395 |
|
256 |
|
653 |
|
1,588 |
|
|
Discontinued operations |
|
|
|
|
|
|
|
||
|
|
Income
(loss) on discontinued operations, |
|
|
|
|
|
|
|
|
|
|
net of income taxes |
– |
|
(480) |
|
43 |
|
(542) |
|
|
|
Income (loss) before extraordinary gain |
395 |
|
(224) |
|
696 |
|
1,046 |
|
|
Extraordinary gain on purchase of subordinated |
|
|
|
|
|
|
|
||
|
|
debentures, net of income taxes |
– |
|
348 |
|
– |
|
348 |
|
|
|
Net income |
$ 395 |
|
$ 124 |
|
$ 696 |
|
$ 1,394 |
|
|
|
|
|
|
|
|
|
|
||
|
BASIC NET INCOME (LOSS) PER SHARE |
|
|
|
|
|
|
|
||
|
From continuing operations |
$ .03 |
|
$
.02 |
|
$ .05 |
|
$ .11 |
||
|
From discontinued operations |
– |
|
(.03) |
|
– |
|
(.04) |
||
|
From extraordinary gain |
– |
|
.02 |
|
– |
|
.02 |
||
|
Net income per share |
$ .03 |
|
$
.01 |
|
$ .05 |
|
$ .09 |
||
|
|
|
|
|
|
|
|
|
||
|
DILUTED NET INCOME (LOSS) PER SHARE |
|
|
|
|
|
|
|
||
|
From continuing operations |
$ .03 |
|
$
.02 |
|
$ .05 |
|
$ .11 |
||
|
From discontinued operations |
– |
|
(.03) |
|
– |
|
(.04) |
||
|
From extraordinary gain |
– |
|
.02 |
|
– |
|
.02 |
||
|
Net income per share |
$ .03 |
|
$
.01 |
|
$ .05 |
|
$ .09 |
||
|
|
|
|
|
|
|
|
|
||
|
Basic weighted average number of shares |
|
|
|
|
|
|
|
||
|
|
outstanding |
15,085 |
|
14,897 |
|
15,085 |
|
14,897 |
|
|
Diluted weighted average number of shares |
|
|
|
|
|
|
|
||
|
|
outstanding |
15,110 |
|
15,313 |
|
15,134 |
|
15,366 |
|
MOVIE STAR, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands, Except Number of Shares)
|
|
December 31, 2001 |
|
June 30, 2001* |
||
|
|
(Unaudited) |
|
|
||
|
ASSETS |
|
|
|
||
|
Current assets |
|
|
|
||
|
Cash |
$ 209 |
|
$ 261 |
||
|
Receivables, net |
8,017 |
|
7,859 |
||
|
Inventory |
10,977 |
|
11,947 |
||
|
Prepaid expenses and other current assets |
2,307 |
|
2,544 |
||
|
|
Total current assets |
21,510 |
|
22,611 |
|
|
|
|
|
|
||
|
Property, plant and equipment, net |
1,400 |
|
2,217 |
||
|
Other assets |
2,990 |
|
2,971 |
||
|
|
|
|
|
||
|
|
Total assets |
$
25,900 |
|
$
27,799 |
|
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||
|
Current liabilities |
|
|
|
||
|
Notes payable |
$ 8,157 |
|
$ 3,734 |
||
|
Current maturities of long-term debt and
capital lease |
|
|
|
||
|
|
obligations |
49 |
|
6,593 |
|
|
Accounts payable and accrued expenses |
3,786 |
|
4,351 |
||
|
|
Total current liabilities |
11,992 |
|
14,678 |
|
|
|
|
|
|
||
|
Capital lease obligations |
50 |
|
70 |
||
|
|
|
|
|
||
|
Deferred lease liability |
85 |
|
30 |
||
|
|
|
|
|
||
|
Commitments and contingencies |
– |
|
– |
||
|
|
|
|
|
||
|
Shareholders’ equity |
|
|
|
||
|
Common stock $.01 par value – authorized
30,000,000 shares; |
|
|
|
||
|
|
issued 17,102,000 shares in December 2001 and |
|
|
|
|
|
|
16,954,000 in June 2001 |
171 |
|
170 |
|
|
Additional paid-in capital |
4,147 |
|
4,092 |
||
|
Retained earnings |
13,073 |
|
12,377 |
||
|
|
17,391 |
|
16,639 |
||
|
|
|
|
|
||
|
Less: Treasury stock, at cost – 2,017,000
shares |
3,618 |
|
3,618 |
||
|
|
Total shareholders’ equity |
13,773 |
|
13,021 |
|
|
|
|
|
|
||
|
Total liabilities and shareholders’ equity |
$
25,900 |
|
$
27,799 |
||
|
|
|
|
|
||
|
*
Derived from audited financial statements |
|
|
|
||