PICKERINGTON, Ohio,
Feb. 5, 2013 /PRNewswire/
-- R.G. Barry Corporation (Nasdaq: DFZ) today said that
its second-quarter/first-half consolidated performance was in line
with its previously-reported expectations for its fiscal 2013
year.
For the half ended December 29,
2012, the Company reported, on a consolidated basis:
- Net earnings of $11.4 million, or
$0.99 per diluted share, down 13.6%
from $13.2 million, or
$1.17 per diluted share, in the first
half of fiscal 2012;
- Net sales of $95.7 million versus
net sales of $105.8 million one year
ago;
- Gross profit as a percent of sales at 43.3% up from 42.8% in
the first half of fiscal 2012; and
- Selling, general and administrative expenses of $22.9 million versus $23.3
million in the comparable period one year ago.
Consolidated quarterly results included:
- Net earnings of $5.3 million, or
$0.46 per diluted share, versus
$6.4 million, or $0.56 per diluted share, in the second quarter of
fiscal 2012;
- Net sales of $48.5 million
compared to net sales of $55.6
million in the equivalent period last year;
- Gross profit as a percent of net sales 42.4% up from 41.4% one
year ago; and
- Selling, general and administrative expenses down 3.9% at
$11.9 million versus $12.4 million in the second quarter last
year.
Footwear Segment
The company said the 13.7%
year-over-year decrease in first half net footwear sales to
$77.8 million reflected reductions in
certain seasonal programs and generally soft July-to-December 2012 retail business in some channels.
Footwear net sales for the quarter were $39.5 million versus $47.9
million in the equivalent period last year.
Footwear segment gross profit as a percentage of first half net
sales at 40.5% rose 40 basis points from the comparable period of
fiscal 2012; and quarterly gross profit as a percentage of net
sales expanded to 39.7% from 38.5% in the second quarter one year
ago. The increases were due primarily to changes in product and
customer mix.
The segment generated a first half operating profit of
$20.7 million, down $4.1 million from last year; and a second quarter
operating profit of $9.8 million down
from $12.3 million in the second
quarter of fiscal 2012.
Accessories Segment
Six-month net sales in Accessories
segment rose 14.1% in both new and existing channels to
$18.0 million versus $15.7 in the equivalent period of fiscal 2012.
For the quarter, accessories net sales were up 17.1% at
$9.0 million.
Accessories gross profit dollars for the half rose by 8.9% to
$10.0 million, although gross profit
as a percentage of net sales contracted by 270 basis points to
55.4% compared to one year ago. For the quarter, gross profit was
$4.9 million, up 7.6% from the prior
year. The changes in gross profit reflected both a shift in
product mix and increased shipments to retailers versus the
comparable periods of fiscal 2012.
Segment operating profits of $1.6
million for the quarter and $3.4
million for the half were basically flat versus last year as
a result of increased shipping costs related to higher sales and to
increased expenses from the Company's continuing investment in its
brands and long-term growth strategy.
Management Comments
"We continue aligning our business
for tomorrow while consistently producing operating efficiencies
today that place us among the best in our industry," said
Greg Tunney, President and Chief
Executive Officer. "During the first half of this year we
introduced baggallini into new channels. We extended the
distribution of our Foot Petals brand. And, we launched an
international growth initiative."
Jose Ibarra, Senior Vice
President Finance and Chief Financial Officer added, "Our 6-month
consolidated gross profit as a percentage of net sales expanded by
50 basis points despite the 9.5% drop in six-month net sales.
Consolidated expenses for the half were down nearly 2%
year-over-year, even as we continued investing in our brands. We
ended the important holiday selling season with our inventory
levels and mix properly positioned for the remainder of this year;
and our cash and short-term investments at the half were up 14%
from one year ago at $41.4
million.
"We continue refining the elements of our business that are
within our control; and we are confident in the viability of our
operating model. The Company is financially healthy and
well-positioned to continue its focus on strengthening existing
brands through investment and acquiring new brands for our
expanding portfolio," he said.
Looking Ahead
Mr. Tunney concluded, "We expect to
finish our year among the best-performing companies in our
category, but fiscal 2013 will be the first time in seven years
that we have not posted top-line growth. Our decision to exit
certain seasonal footwear programs, the elimination of a key men's
slipper program and general retail softness in our replenishment
footwear business all will negatively impact our overall annual
performance to a greater extent than we originally envisioned. We
expect our Accessories segment to meet or exceed its growth and
profitability objectives for fiscal 2013, but those gains will only
partially offset anticipated declines in footwear.
"While we are disappointed by these short-term issues, our
approach to operating this business remains laser-focused on the
future. We are committed to our strategies and confident that they
will, over time, generate continuing innovation, efficiency, growth
and profitability for our consumers, customers and
shareholders."
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 Standard
Time today. Management will discuss the Company's
performance, its plans for the future and will accept questions
from participants. The conference call is available at (800)
860-2442 in the U.S., (866) 605-3852 in Canada and +1 (412) 858-4600 internationally
until five minutes before starting time. To listen via the
Internet, log on at:
http://www.videonewswire.com/event.asp?id=91816.
Replays of the call will be available several hours after its
completion. The audio replay can be accessed through Feb. 20, 2013, by calling (877) 344-7529 in the
U.S. or (412) 317-0088 internationally and using passcode 10024140.
A written transcript and audio replay of the call will be posted
for at least 12 months at the Investor Room section of
rgbarry.com.
About RG Barry
RG Barry develops great accessories
brands that provide fashionable, solution-oriented products that
touch consumers. Our primary brands include: Dearfoams slippers
dearfoams.com; baggallini handbags, totes and travel accessories
baggallini.com; and Foot Petals premium insoles and comfort
products footpetals.com. To learn more, visit us at
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
business 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
business. These risks include, but are not limited to: our
continuing ability to source products from third parties located
within and outside North America;
competitive cost pressures; 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; our ability to implement new enterprise
resource information systems; a failure in or a breach of our
operational or security systems or infrastructure, or those of our
third-party suppliers and other service providers, including as a
result of cyber-attacks; the unexpected loss of any of the skills
and experience provided by our senior officers; our ability to
successfully integrate any new business acquisitions; 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 (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 "Item 1A. Risk
Factors" of Part I of our Annual Report on Form 10-K for the fiscal
year ended June 30, 2012 (the "2012
Form 10-K") and our other filings with the Securities and Exchange
Commission (the "SEC"), 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
2012 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.
—financial charts
follow—
R.G.
BARRY CORPORATION AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF INCOME
|
(in
thousands of dollars, except for per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
|
|
Thirteen
|
|
|
|
Twenty-Six
|
|
Twenty-Six
|
|
|
|
Weeks
Ended
|
|
Weeks
Ended
|
|
|
|
Weeks
Ended
|
|
Weeks
Ended
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
%
Increase
|
|
(unaudited)
|
|
(unaudited)
|
|
%
Increase
|
|
December
29, 2012
|
|
December
31, 2011
|
|
Decrease
|
|
December
29, 2012
|
|
December
31, 2011
|
|
Decrease
|
Net
sales
|
$
48,505
|
|
$
55,599
|
|
-12.8%
|
|
$
95,737
|
|
$
105,829
|
|
-9.5%
|
Cost of
Sales
|
27,951
|
|
32,602
|
|
-14.3%
|
|
54,266
|
|
60,579
|
|
-10.4%
|
Gross profit
|
20,554
|
|
22,997
|
|
-10.6%
|
|
41,471
|
|
45,250
|
|
-8.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (as percent of
net sales)
|
42.4%
|
|
41.4%
|
|
|
|
43.3%
|
|
42.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
11,930
|
|
12,415
|
|
-3.9%
|
|
22,921
|
|
23,295
|
|
-1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
8,624
|
|
10,582
|
|
-18.5%
|
|
18,550
|
|
21,955
|
|
-15.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
242
|
|
88
|
|
|
|
465
|
|
175
|
|
|
Interest
income, net
|
(175)
|
|
(189)
|
|
-7.4%
|
|
(351)
|
|
(444)
|
|
-20.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings, before income
taxes
|
8,691
|
|
10,481
|
|
-17.1%
|
|
18,664
|
|
21,686
|
|
-13.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
3,390
|
|
4,130
|
|
-17.9%
|
|
7,229
|
|
8,445
|
|
-14.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
5,301
|
|
$
6,351
|
|
-16.5%
|
|
$
11,435
|
|
$
13,241
|
|
-13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per common share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.47
|
|
$
0.57
|
|
-17.5%
|
|
$
1.01
|
|
$
1.19
|
|
-15.1%
|
Diluted
|
$
0.46
|
|
$
0.56
|
|
-17.9%
|
|
$
0.99
|
|
$
1.17
|
|
-15.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
11,372
|
|
11,179
|
|
|
|
11,327
|
|
11,157
|
|
|
Diluted
|
11,564
|
|
11,364
|
|
|
|
11,526
|
|
11,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
(in
thousands of dollars)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
(audited)
|
|
December
29, 2012
|
|
December
31, 2011
|
|
|
|
June 30,
2012
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash & Short term investments
|
$
41,415
|
|
$
36,210
|
|
|
|
$
41,711
|
Accounts
Receivable, net
|
19,481
|
|
20,280
|
|
|
|
13,176
|
Inventory
|
19,829
|
|
18,889
|
|
|
|
21,149
|
Prepaid
expenses and other current assets
|
2,932
|
|
3,184
|
|
|
|
2,864
|
Total current assets
|
83,657
|
|
78,563
|
|
|
|
78,900
|
|
|
|
|
|
|
|
|
Net
property, plant and equipment
|
4,136
|
|
4,264
|
|
|
|
4,186
|
|
|
|
|
|
|
|
|
Other
assets
|
44,150
|
|
46,088
|
|
|
|
45,180
|
Total Assets
|
$
131,943
|
|
$
128,915
|
|
|
|
$
128,266
|
|
|
|
|
|
|
|
|
LIABILITIES & SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Short-term
notes payable
|
-
|
|
1,750
|
|
|
|
1,750
|
Accounts
payable
|
8,654
|
|
5,763
|
|
|
|
10,962
|
Other
current liabilities
|
10,634
|
|
12,809
|
|
|
|
9,987
|
Total current
liabilities
|
19,288
|
|
20,322
|
|
|
|
22,699
|
|
|
|
|
|
|
|
|
Long-term
debt
|
18,214
|
|
22,500
|
|
|
|
20,357
|
Accrued
retirement costs and other
|
10,811
|
|
10,801
|
|
|
|
10,803
|
Shareholders' equity, net
|
83,630
|
|
75,292
|
|
|
|
74,407
|
Total liabilities & shareholders'
equity
|
$
131,943
|
|
$
128,915
|
|
|
|
$
128,266
|
|
|
|
|
|
|
|
|
SOURCE R.G. Barry Corporation