PICKERINGTON, Ohio,
Nov. 5, 2013 /PRNewswire/
-- R.G. Barry Corporation (Nasdaq: DFZ), today said
that shifts in the timing of its holiday shipments to retailers and
the sluggish retail environment were among factors that combined to
negatively affect its first-quarter fiscal 2014 results.
For the quarter ended September 28,
2013, the Company reported, on a consolidated basis:
- Net earnings of $4.8 million, or
$0.41 per diluted share, down 22.4%
from $6.1 million, or $0.54 per diluted share, in the first quarter of
fiscal 2013;
- Net sales of $41.9 million down
11.3% versus net sales of $47.2
million one year ago;
- Gross profit as a percent of sales at 46.5%, up 220 basis
points versus 44.3% in the first quarter last year; and
- Selling, general and administrative expenses of $11.9 million, up 8.0% versus $11.0 million in the comparable quarter a year
ago, primarily reflecting increased investment spending that is
aligned with long-term growth initiatives not in place one year
ago.
"We are obviously disappointed in our first quarter results,"
said Greg Tunney, President and
Chief Executive Officer, "but ours has never been a
quarter-to-quarter business. Holiday shipments to retailers can
occur in either the first or second quarter, based upon retailer
needs; and retail sell-through during the Christmas season has
significant impact on our rate of profitability. We are working
with our customers to maximize our in-store performance between now
and December 31," he said.
Changes in the timing of some seasonal footwear shipments to
retailers, the decision to exit a negative-margin private label
department store footwear program and sluggish retail sales all
contributed to the decline in consolidated quarterly net sales
compared to last year. Improved gross profit as a percentage of net
sales, in spite of lower top-line and gross profit dollars,
resulted from our continuing shift to a more profitable mix of
products and channels.
The decline in quarterly consolidated net sales was attributed
primarily to the Footwear segment, which was down $5.4 million or 14.2% to $32.8 million from the comparable period last
year. A 160 basis point increase in Footwear gross profit as
a percentage of net sales to 43.0% reflected the Company's
continuing move toward a mix of higher-margin branded footwear
sales and away from private label and licensed products.
Accessories segment net sales increased 1.4%, or $128,000 compared to the first quarter last year,
to $9.0 million and produced a 59.1%
gross profit as a percentage of net sales. The nearly 250 basis
point increase in gross profit as a percentage of net sales versus
the comparable first quarter of fiscal 2013 was driven by the
Company's strategic shift out of discount and lower margin
businesses, resulting in a change in product and channel mix across
the segment.
Looking Ahead
"We recognize that based upon our
business outlook and economic headwinds, this is not going to be an
easy year for many suppliers to retail," said Jose G. Ibarra, Senior Vice President Finance
and Chief Financial Officer. "Given the current environment,
we expect consolidated revenue for the year to be down slightly
compared with fiscal 2013. We will have a much better view of the
full year when we report on the second quarter and the first half
in February."
"We remain fully committed to our growth plan and strategy of
investment in both existing and new businesses," added Mr. Tunney.
"While we continue to refine our model with a goal of
balanced performance, we are not there yet. The real long-term
solution for us lies in generating sustainable, profitable growth
from channels such as e-commerce and international and expansion
into new accessories product categories through acquisitions. Our
strong operating cash flow and healthy balance sheet give us the
flexibility to fund growth initiatives even in a challenging retail
environment."
Conference Call/Webcast Today
RG Barry 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 teleconference participants.
To listen via the Internet, log on to
http://www.videonewswire.com/event.asp?id=96753.
The conference call will be available at 800.860.2442 (U.S.),
866.605.3852 (Canada) and
+1.412.858.4600 (international) until five minutes before starting
time.
Replays will be available beginning approximately one hour after
the call conclusion and running and through 9 a.m. Eastern Time, Nov.
20, 2013 at 877.344.7529 (U.S.) and +1.412.317.0088
(Canada/international); ask for
conference 10036385. Replays and a written transcript of the call
will be posted for up to one year in the Investor Room section of
rgbarry.com.
About RG Barry
RG Barry develops accessories brands
that provide fashionable, solution-oriented products for a great
life. 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 secure and protect trademarks and other intellectual
property; 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 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 June 29, 2013 (the
"2013 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 2013
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 Weeks
Ended
|
|
Thirteen Weeks
Ended
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
% Increase
|
|
September 28,
2013
|
|
September 29,
2012
|
|
Decrease
|
Net sales
|
$
41,911
|
|
$
47,233
|
|
-11.3%
|
Cost of
sales
|
22,439
|
|
26,316
|
|
-14.7%
|
Gross
profit
|
19,472
|
|
20,917
|
|
-6.9%
|
|
|
|
|
|
|
Gross profit (as percent of
net sales)
|
46.5%
|
|
44.3%
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
11,882
|
|
10,990
|
|
8.1%
|
|
|
|
|
|
|
Operating profit
|
7,590
|
|
9,927
|
|
-23.5%
|
|
|
|
|
|
|
Other
income
|
363
|
|
223
|
|
|
Interest
(expense), net
|
(139)
|
|
(177)
|
|
-21.5%
|
|
|
|
|
|
|
Earnings, before income
taxes
|
7,814
|
|
9,973
|
|
-21.6%
|
|
|
|
|
|
|
Income tax
expense
|
3,051
|
|
3,839
|
|
-20.5%
|
|
|
|
|
|
|
Net
earnings
|
$
4,763
|
|
$
6,134
|
|
-22.4%
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
Basic
|
$
0.42
|
|
$
0.54
|
|
-22.2%
|
Diluted
|
$
0.41
|
|
$
0.54
|
|
-24.1%
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
|
|
|
|
|
|
Basic
|
11,395
|
|
11,282
|
|
|
Diluted
|
11,516
|
|
11,454
|
|
|
|
|
|
|
|
|
Common shares
outstanding at the end of period
|
11,388
|
|
11,265
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share
|
$
0.09
|
|
$
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands
of dollars)
|
|
(unaudited)
|
|
(unaudited)
|
|
(audited)
|
|
September 28,
2013
|
|
September 29,
2012
|
|
June 29,
2013
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash & short-term
investments
|
$
19,285
|
|
$
14,578
|
|
$
39,500
|
Accounts receivable,
net
|
29,766
|
|
34,301
|
|
16,755
|
Inventory
|
33,989
|
|
30,610
|
|
24,239
|
Prepaid expenses and
other current assets
|
4,156
|
|
2,989
|
|
3,670
|
Total
current assets
|
87,196
|
|
82,478
|
|
84,164
|
|
|
|
|
|
|
Net property, plant
and equipment
|
4,126
|
|
4,150
|
|
4,178
|
|
|
|
|
|
|
Other
assets
|
41,514
|
|
44,685
|
|
41,911
|
Total
assets
|
$
132,836
|
|
$
131,313
|
|
$
130,253
|
|
|
|
|
|
|
LIABILITIES &
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Short-term notes
payable & current installments of long-term debt
|
4,286
|
|
6,036
|
|
4,286
|
Accounts
payable
|
10,145
|
|
8,078
|
|
10,655
|
Other current
liabilities
|
5,803
|
|
7,467
|
|
4,899
|
Total current liabilities
|
20,234
|
|
21,581
|
|
19,840
|
|
|
|
|
|
|
Long-term
debt
|
15,000
|
|
19,286
|
|
16,071
|
Accrued retirement
costs and other
|
6,600
|
|
10,763
|
|
7,165
|
Shareholders' equity,
net
|
91,002
|
|
79,683
|
|
87,177
|
Total
liabilities & shareholders' equity
|
$
132,836
|
|
$
131,313
|
|
$
130,253
|
SOURCE R.G. Barry Corporation