Dreams, Inc. (AMEX:DRJ) announced today its financial results for
the full fiscal year 2007 and its fiscal fourth quarter. For the
fiscal year (�FY�) ending March 31, 2007, revenue increased 31% to
a record $56 million compared to $42.7 million reported in FY 2006.
For the quarter, revenues grew 27% to $14.6 million, up from $11.5
million for the quarter last year. Chief Executive Officer Ross
Tannenbaum commented, �This was a great year for Dreams, Inc.
(�Dreams�). With five consecutive years of healthy double-digit
growth in revenue and significant improvement in our bottom line,
we are clearly pleased with our results from our on-going
operations. �For FY 2007 pretax income was $1.4 million, versus
$4.3 million in FY 2006, and net income for this year was nearly
$1.0 million versus $2.5 million last year. For the fourth quarter
this year, net losses before taxes were $774,000, versus a $2.3
million dollar gain for the fourth quarter last year. Net loss for
the fourth quarter this year was $447,000, versus $1.3 million in
net income for the fourth quarter last year. �However, last year,
our results were enhanced by our recording a $3.6 million insurance
claim proceeds in the fourth quarter as �other income�, so the true
comparison to measure our results from on-going operations requires
us to exclude the extraordinary gain. This now has our FY2007
pretax income growing to over $1.4 million, versus $654,000 in
FY2006, and our fourth quarter pretax losses down around 43% to
$774,000 this year from approximately $1.4 million in pretax losses
in the fourth quarter of last year. Net income after taxes
increased to nearly $1.0 million, versus $388,000 in FY2006, and
net losses after taxes were reduced 44% to $447,000 this year,
versus $801,000 in net losses after taxes for the fourth quarter
last year. �It is encouraging that we were able to stem these
historical fourth quarter losses in spite of additional operating
expenses associated with the post-acquisition costs of integrating
the Las Vegas based operations from Pro-Stars, Inc., the start-up
costs associated with beginning our Sarbanes-Oxley 404 compliance
and expenses associated with due-diligence towards a strategic
acquisition that ultimately, did not close. In fact, the trend
towards profitability for our fiscal fourth quarter is underway.
�Driven by strong demand for our products and services, annual
revenue from retail operations increased 57% to $39.4 million. The
upward momentum was due, in part, to our offering of nearly 65,000
products including officially licensed memorabilia of the NFL, MLB,
NBA, NHL, NCAA and NASCAR, among items from more than 600 teams and
over 2,000 different athletes through our company-owned Field of
Dreams stores and our two principal web sites, FansEdge.com and
ProSportsmemorabilia.com. Annual revenue from manufacturing and
distribution was approximately $15 million for FY2007, versus $16
million last year. Dreams, Inc. and Subsidiaries Consolidated
Statements of Operations For the Years Ended March 31, 2007, 2006
and 2005 (Dollars in Thousands, except share and earnings per share
amounts) � � � March 31, March 31, March 31, 2007 2006 2005
Revenues: Manufacturing/Distribution $ 14,960 $ 16,185 $ 12,922
Retail 39,382 25,095 18,833 Management fees, net 334 224 324
Franchise fees and royalties 1,100 1,226 899 Other � 184 � � � � �
� � Total revenues � 55,960 � � 42,730 � � 32,978 � � Expenses:
Cost of sales � manufacturing/distribution 9,151 10,181 7,303 Cost
of sales � retail 22,638 14,279 10,934 Operating expenses 21,444
16,523 14,418 Depreciation and amortization � 708 � � 639 � � 375 �
Total expenses � 53,941 � � 41,622 � � 33,030 � Income (loss) from
operations 2,019 1,108 (52 ) � Interest (expense), net (528 ) (454
) (585 ) � Other (expense) / income � (42 ) � 3,657 � � � � Income
(loss) before income taxes 1,449 4,311 (637 ) � Income tax
(expense) / benefit (469 ) (1,762 ) 174 � Net income / (loss) $ 980
� $ 2,549 � $ (463 ) Basic and diluted income (loss) per share $
0.03 � $ 0.09 � $ (0.05 ) Weighted average shares outstanding �
32,271,327 � � 27,404,643 � � 9,393,866 � (a) Non-GAAP Illustration
excluding the $3.6 million extraordinary gain recorded in March
2006. (Dollars in Thousands) � Year Ending March 31, 2007 (a)2006 �
Income from operations $ 2,019 $ 1,108 Interest expense, net 528
454 Other (expense) / income � (42 ) � ---- � Income before income
taxes & extraordinary gain 1,449 654 Income tax expense 469 266
Net income less extraordinary gain $ 980 � $ 388 � � � � Three
Months Ended March 31, 2007 (a)2006 � (Loss) from operations $ (594
) $ (1,256 ) Interest expense, net 138 115 Other (expense) / income
� (42 ) � ---- � (Loss) before income taxes & extraordinary
gain (774 ) (1,371 ) Income tax benefit 327 570 Net (loss) less
extraordinary gain $ (447 ) $ (801 ) Financial Highlights: FY 2007
(ending March 31, 2007) Compared to FY 2006 Revenue increased 31%
to $56 Million (b) Net income improved 150% to nearly $1 Million
Working Capital rose 27% to $17.3 Million Stock Holder�s Equity
grew 50% to over $24.3 Million E-commerce Sales surge 61% to $31.4
Million Financial Highlights: FY 2007Q4 (ending March 31, 2007)
Compared to FY 2006Q4 Revenue increased 27% to $14.6 Million (b)
Net losses reduced 44% to $447,000 (b) Results represent exclusion
of $3.6 million from �extraordinary gain� recorded in March 2006.
Additional accomplishments and recent highlights include: June 22,
2007 � Dreams named to the closely watched �Russell Index� which
tracks the 4,000 largest U.S. companies based on market
capitalization. June 20, 2007 - Launched our newly designed web
site www.dreamscorp.com. June 14, 2007 � FansEdge, Inc., the
internet division of Dreams, landed at number 39 on the coveted
2006 �Top 500 Fastest Growing Retailers� list from industry bible,
Internet Retailer Magazine. June 6, 2007 � Dreams receives $18
million in financings from Comerica Bank. June 6, 2007 � Dreams
received the �Emerging Company Award� from the Association for
Corporate Growth as a result of our growth both in revenues and
profitability amongst our peers in the under $500 million category.
April 16, 2007 � Dreams common shares begin trading on the American
Stock Exchange under the symbol �DRJ�. Corporate Initiatives
include: Designing and building our first prototype FansEdge� brick
and mortar store in the greater Chicago market. Enhancing our 365
Live marketing model by populating the additional days with
athletes such as Dan Marino, Dick Butkus, Steve Garvey and others
to complement the 15 days per month, already featuring Pete Rose.
Improving blended margins by going from manufacture to retail.
Targeting additional Las Vegas based Field of Dreams� locations, as
this area of the country has provided the highest volumes for our
products and services. Continuing to pursue a dual pronged strategy
for growth; that includes both organic growth and strategic
acquisitions. �Key components of our organic growth strategy
include building brand recognition; improving sales conversion
rates both in our stores and web sites; exploring additional
distribution channels for our products; and lastly, by cross
pollinating corporate assets amongst our various operating
divisions. �Our strategic acquisition initiatives will focus on
e-commerce companies, brick and mortar retailers, other
manufacturers of licensed sports and entertainment products and
collectibles, companies that can offer incremental distribution
channels for our products and companies whose value can be enhanced
by placing them under the Dreams corporate umbrella. Hence, our
ability to evaluate potential acquisition candidates and consummate
these transactions will remain an integral part of our business
model. �Our overall objective is to establish a market leading
totally licensed, sports and entertainment products enterprise and
true multi-channel retailer. That is, to service the customer by
every possible means necessary in an efficient and professional
manner by driving and building our brands through on-line, brick
and mortar, catalogue, and in-bound and out-bound call centers.
�All in all, it has been a productive year and we feel that we are
well positioned to become the consolidator in this highly
fragmented industry,� concluded Ross Tannenbaum. DREAMS, INC.
trades on the American Stock Exchange under the symbol �DRJ�. For
more information on Dreams, Inc. and its subsidiaries, please visit
our newly designed web site: www.dreamscorp.com. Except for
historical information contained herein, the matters discussed in
this press release contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that involve
substantial risks and uncertainties. When used in this press
release and in any documents incorporated by reference herein, the
words "anticipate," "believe," "estimate," "may," "intend,"
"expect" and similar expressions identify certain of such
forward-looking statements. Actual results, performance, or
achievements could differ materially from those contemplated,
expressed, or implied by the forward-looking statements contained
herein. These forward-looking statements are based largely on the
expectations of Dreams, Inc. ("the Company") and are subject to a
number of risks and uncertainties that are subject to change based
on factors which are, in many instances, beyond the Company's
control. These include, but are not limited to, risks and
uncertainties associated with: the impact of economic, competitive
and other factors affecting the Company and its operations,
markets, products and services. Past performance is not indicative
of future results. In addition to the risks and factors identified
above, reference is also made to other risks and factors detailed
in reports filed by the Company with the Securities and Exchange
Commission. The Company cautions that the foregoing factors are not
exclusive.
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