PICKERINGTON, Ohio,
May 10, 2011 Footwear and
accessories marketer R.G. Barry Corporation (Nasdaq:DFZ)
today reported operating results for its fiscal 2011 third quarter
and nine months ended April 2,
2011.
For the quarter, the Company reported from its consolidated
operations:
- A net loss of approximately $42,000, which includes about $900,000 of acquisition related costs, equates to
$0.00 per diluted share, versus net
earnings of $539,000 or $0.05 per diluted share, reported in the third
quarter of fiscal 2010;
- Net sales of $20.1 million, down
9.4 percent from $22.2 million
reported for the corresponding period last year; and
- Gross profit as a percent of net sales at 39.4 percent versus
40.4 percent in the comparable quarter one year ago.
For the nine months, on a consolidated basis, the Company
reported:
- Net earnings of $8.37 million, or
$0.75 per diluted share, which
includes approximately $900,000 of
acquisition related costs, down 24.1 percent from $11.0 million, or $1.00 per diluted share, in the comparable period
of fiscal 2010;
- Net sales declined to $106.0
million from $107.2 million in
the first nine months last year; and
- Gross profit as a percent of net sales was 37.1 percent versus
42.2 percent in the equivalent period of fiscal 2010.
On the consolidated balance sheet:
- Cash and short-term investments totaled $28.4 million, down from $46.7 million reported one year ago, principally
as a result of acquisition activity;
- Inventory was $19.8 million, up
from $14.1 million in the comparable
period of fiscal 2010, primarily as a result of inventory acquired
in the acquisitions of the Foot Petals and Baggallini
businesses;
- Long-term debt of $25.4 million,
representing new borrowing in support of the Company's recent
acquisition activity; and
- Total shareholders' equity of $61.5
million, up from $57.8 million
at the end of the third quarter one year ago.
Management Comments
"Fiscal 2011 has thus far been transformational for our
Company," said Greg Tunney,
President and Chief Executive Officer. "Our nine month results
reflect the impact of incremental costs related to our previously
discussed fall 2010 delivery issues. We have taken appropriate
actions and consider these issues fixed. Two major factors
negatively impacted our third quarter performance. A new warehouse
club program launched during the third quarter last year was not
repeated at the same level this year; and we experienced softness
in the replenishment slipper business with our largest footwear
customer. We have proactively aligned our products and business
strategies for this customer to coincide with their evolving needs
and are confident about the viability of our programs and the
future of our long-term partnership.
"The exciting transformational aspects of this year are related
to the impact our two recent acquisitions and to our decision to
exit under-performing footwear businesses will have on our overall
performance in fiscal 2012 and beyond. As a result of these
important actions, we will enter our new year on July 3 as a more balanced, faster growing and
more profitable multi-dimensional provider of footwear and
accessories," Mr. Tunney said.
"We obviously are pleased by the initial positive impact of the
new Foot Petals business on our third quarter consolidated
performance," added Jose Ibarra,
Senior Vice President Finance and Chief Financial Officer. "With
the third quarter, we have begun segment financial reporting. Our
business now is divided into footwear and accessories reporting
segments, which are comprised of diverse customer bases, products
and financial metrics. When our new Baggallini business is
included in the fourth quarter results this year, it will begin to
validate our new operating model, which we expect to perform at
rates well above those traditionally generated by our footwear
business alone."
Conference Call/Webcast Today
R.G. Barry Corporation senior management will conduct a
conference call for all interested parties at 9:00 a.m. Eastern Daylight Time today. Management
will discuss the Company's performance, its plans for the future
and will accept questions from participants. To listen via the
Internet, log on to
http://www.videonewswire.com/event.asp?id=79121.
The conference call will also be available at 800.860.2442
(U.S.) and +1.412.858.4600 (international) until five minutes
before starting time.
Replays of the call and a written transcript will be posted on
the Company's Website, www.rgbarry.com, under the "Investor Room"
section. Replays will also be available beginning approximately one
hour after the call and through 9
a.m. Eastern May 18, 2011 at
877.344.7529 (U.S.) and +1.412.317.0088 (international); ask for
conference number 450640.
About R.G. Barry Corporation
R.G. Barry Corporation creates and markets lifestyle brands and
products that are functional, fashionable and that touch consumers.
Our brands include: Dearfoams, the world's best-known slipper brand
(www.dearfoams.com); baggallini handbags, totes and travel
accessories (www.baggallini.com); and Foot Petals premium insoles
and comfort products (www.footpetals.com). To learn more
about our business, visit us at www.rgbarry.com.
Forward-Looking Statements
Some of the disclosures in this news release contain
forward-looking statements that involve substantial risks and
uncertainties. You can identify these statements by
forward-looking words such as "may," "expect," "could," "should,"
"anticipate," "believe," "estimate," or words with similar
meanings. Any statements that refer to projections of our
future performance, anticipated trends in our businesses and other
characterizations of future events or circumstances are
forward-looking statements. These statements, which are
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995, are based upon our
current plans and strategies and reflect our current assessment of
the risks and uncertainties related to our businesses. These
risks could include, but are not limited to the following: our
continuing ability to source products from third parties located
outside North America; unplanned
delivery and shipping costs resulting from delays in the
manufacturing time for our products; competitive cost pressures;
our ability to successfully integrate acquisitions, such as
Baggallini, Inc. and Foot Petals, Inc.; the loss of retailer
customers to competitors, consolidations, bankruptcies or
liquidations; shifts in consumer preferences; the impact of the
global financial crisis and general economic conditions on consumer
spending; the impact of the highly seasonal nature of our footwear
business upon our operations; inaccurate forecasting of consumer
demand; difficulties liquidating excess inventory; disruption of
our supply chain or distribution networks; and our investment of
excess cash in certificates of deposit and other variable rate
demand note securities. You should read this news release carefully
because the forward-looking statements contained in it may (1)
discuss our future expectations; (2) contain projections of our
future results of operations or of our future financial condition;
or (3) state other "forward-looking" information. The risk factors
described in this news release and in our filings with the
Securities and Exchange Commission (the SEC), in particular "Item
1A. Risk Factors" of Part I of our Annual Report on Form 10-K for
the fiscal year ended July 3, 2010
(the "2010 Form 10-K"), give examples of the types of uncertainties
that may cause actual performance to differ materially from the
expectations we describe in our forward-looking statements.
If the events described in "Item 1A. Risk Factors" of Part I
of our 2010 Form 10-K occur, they could have a material adverse
effect on our business, operating results and financial condition.
You should also know that it is impossible to predict or identify
all risks and uncertainties related to our business.
Consequently, no one should consider any such list to be a
complete set of all potential risks and uncertainties.
Forward-looking statements speak only as of the date on which
they are made, and we undertake no obligation to update any
forward-looking statement to reflect circumstances or events that
occur after the date on which the statement is made to reflect
unanticipated events, except as required by applicable law.
Any further disclosures in our filings with the SEC should
also be considered.
R.G. BARRY
CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(in
thousands of dollars, except for per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
|
|
Thirteen
|
|
%
|
|
Thirty-nine
|
|
Forty
|
|
%
|
|
|
Weeks
Ended
|
|
Weeks
Ended
|
|
Increase/
|
|
Weeks
Ended
|
|
Weeks
Ended
|
|
Increase/
|
|
|
April 2,
2011
|
|
April 3,
2010
|
|
Decrease
|
|
April 2,
2011
|
|
April 3,
2010
|
|
Decrease
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
Net sales
|
$
20,113
|
|
$
22,212
|
|
-9.4%
|
|
$
106,042
|
|
$
107,235
|
|
-1.1%
|
|
Cost of Sales
|
12,183
|
|
13,249
|
|
-8.0%
|
|
66,686
|
|
62,020
|
|
7.5%
|
|
Gross profit
|
7,930
|
|
8,963
|
|
-11.5%
|
|
39,356
|
|
45,215
|
|
-13.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (as
percent of ne sales)
|
39.4%
|
|
40.4%
|
|
|
|
37.1%
|
|
42.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
8,080
|
|
8,245
|
|
-2.0%
|
|
26,391
|
|
27,829
|
|
-5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
(150)
|
|
718
|
|
-120.9%
|
|
12,965
|
|
17,386
|
|
-25.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
84
|
|
-
|
|
|
|
278
|
|
-
|
|
|
|
Interest income, net
|
(40)
|
|
36
|
|
-211.1%
|
|
3
|
|
211
|
|
-98.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings, before
income taxes
|
(106)
|
|
754
|
|
-114.1%
|
|
13,246
|
|
17,597
|
|
-24.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
(64)
|
|
215
|
|
-129.8%
|
|
4,873
|
|
6,568
|
|
-25.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
$
(42)
|
|
$
539
|
|
-107.8%
|
|
$
8,373
|
|
$
11,029
|
|
-24.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
-
|
|
$
0.05
|
|
|
|
$
0.76
|
|
$
1.02
|
|
|
|
Diluted
|
$
-
|
|
$
0.05
|
|
|
|
$
0.75
|
|
$
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
|
|
|
|
|
|
|
|
|
|
|
|
|
number of common shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
11,123
|
|
10,914
|
|
|
|
11,086
|
|
10,862
|
|
|
|
Diluted
|
11,123
|
|
11,112
|
|
|
|
11,212
|
|
11,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(in
thousands of dollars)
|
|
|
|
|
|
|
|
|
|
April 2,
2011
|
|
April 3,
2010
|
|
July 3,
2010
|
|
|
(unaudited)
|
|
(unaudited)
|
|
(audited)
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash & Short term
investments
|
$
28,376
|
|
$
46,702
|
|
$
44,942
|
|
Accounts Receivable,
net
|
13,286
|
|
10,509
|
|
8,302
|
|
Inventory
|
19,752
|
|
14,125
|
|
13,486
|
|
Prepaid expenses and other
current assets
|
2,260
|
|
2,076
|
|
2,675
|
|
Total current
assets
|
63,674
|
|
73,412
|
|
69,405
|
|
|
|
|
|
|
|
|
Net property, plant and
equipment
|
4,260
|
|
3,925
|
|
4,125
|
|
|
|
|
|
|
|
|
Other assets
|
50,398
|
|
10,788
|
|
9,839
|
|
Total Assets
|
$
118,332
|
|
$
88,125
|
|
$
83,369
|
|
|
|
|
|
|
|
|
LIABILITIES & SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current portion of long-term
debt and notes payable
|
6,061
|
|
1,844
|
|
1,847
|
|
Accounts payable
|
3,899
|
|
2,980
|
|
3,598
|
|
Other current
liabilities
|
3,362
|
|
6,013
|
|
4,867
|
|
Total current
liabilities
|
13,322
|
|
10,837
|
|
10,312
|
|
|
|
|
|
|
|
|
Long-term debt
|
25,357
|
|
26
|
|
-
|
|
Accrued retirement costs and
other
|
18,141
|
|
19,475
|
|
18,461
|
|
Shareholders' equity,
net
|
61,512
|
|
57,787
|
|
54,596
|
|
Total liabilities &
shareholders' equity
|
$
118,332
|
|
$
88,125
|
|
$
83,369
|
|
|
|
|
|
|
|
SOURCE R.G. Barry Corporation