PICKERINGTON, Ohio,
Feb. 4, 2014 /PRNewswire/
-- R.G. Barry Corporation (NASDAQ: DFZ), today said
that its second-quarter/first-half consolidated performance for
fiscal year 2014 remained consistent with its previously discussed
expectations for the period.
For the quarter ended December 28,
2013, the Company reported, on a consolidated basis:
- Net earnings of $6.1 million, or
$0.53 per diluted share, up versus
$5.3 million, or $0.46 per diluted share, in the second quarter of
fiscal 2013;
- Net sales of $48.0 million
compared to $48.5 million in the
equivalent period last year;
- Gross profit as a percent of net sales at 42.7%, up 30 bps from
42.4% one year ago; and
- Selling, general and administrative expenses declined 9.5% to
$10.8 million versus $11.9 million in the second quarter last
year.
Consolidated six-month results included:
- Net earnings of $10.9 million, or
$0.94 per diluted share, compared
with $11.4 million, or $0.99 per diluted share, in the first half of
fiscal 2013;
- Net sales of $89.9 million versus
net sales of $95.7 million one year
ago;
- Gross profit as a percent of net sales at 44.4% increased 110
bps from 43.3% in the first half of fiscal 2013; and
- Selling, general and administrative expenses of $22.7 million were relatively flat versus
$22.9 million in the comparable
period one year ago.
Footwear Segment
First half footwear net sales
declined 7.5% to $71.9 million
reflecting soft July-to-December 2013
retail business primarily in department store and off-price
channels, partially offset by increased warehouse club and
international shipments. Footwear net sales for the second quarter
were $39.1 million versus
$39.5 million in the equivalent
period last year.
Footwear segment gross profit as a percentage of first half net
sales rose 90 basis points to 41.4% from 40.5% in the comparable
period of fiscal 2013; and quarterly gross profit as a percentage
of net sales expanded 30 bps to 40.0% versus one year ago. The
increases were primarily reflective of favorable changes in product
and customer mix.
The segment generated first half operating profit of
$19.6 million, down $0.4 million versus the first half last year as a
result of lower sales volume partially offset by lower expenses in
a variety of areas. Second quarter operating profit of $10.7 million increased 12.4% from $9.5 million in the second quarter of fiscal
2013. The increased quarterly operating profit principally
reflected lower expenses in a number of categories, including
reduced incentive bonus accruals.
Accessories Segment
Six-month net sales in the
Accessories segment were flat at $18.0
million. For the quarter, accessories net sales decreased
1.3% to $8.9 million versus one year
ago. The decline primarily resulted from the previously discussed
strategic decision to reduce lower margin business in the off-price
channel.
Accessories gross profit rose 2.5% to $10.2 million, and gross profit as a percentage
of net sales expanded 140 basis points to 56.8% compared to the
equivalent period a year ago. Quarterly gross profit and margins
were relatively flat at $4.8 million
or 54.4% of net sales.
Segment operating profits of $1.0
million for the quarter and $1.8
million for the half were off versus last year by 33% and
44% respectively, and showed the impact of the Company's continuing
investment in its long-term growth strategy for its Accessories
segment.
Management Comments
"We continue to lead our peer
group in many key performance metrics despite the challenging
retail environment during the holiday selling season," said
Greg Tunney, President and Chief
Executive Officer. "Our proven model and operational
excellence permitted us to generate healthy profitability, while
investing significant resources in our brands and building a
business that will continue to meet the challenges of both today
and tomorrow."
Jose Ibarra, Senior Vice
President Finance and Chief Financial Officer added, "We ended the
half with a good retail sell-through. Our strategy of continuing to
eliminate underperforming or lower margin components of the
business impacted the top line, but gross margin as a percent of
net sales improved by 110 basis points, despite the
highly-promotional retail environment.
"We continue to experience economic headwinds and a challenging
retail environment. While the Company is financially strong and
well positioned to meet its long-term goals, these factors have led
us to reaffirm our view that consolidated revenue this year will be
down slightly compared with fiscal 2013," Mr. Ibarra said.
Mr. Tunney concluded, "We remain committed to investing in
long-term growth strategies for areas such as international and
ecommerce, both of which grew during the first half, and to
actively pursuing growth through category appropriate acquisitions.
While the support of these strategies is expected to negatively
impact profitability in the short-term, including the current
fiscal year, we are confident that, over time, they will generate
levels of growth and profitability that will keep RG Barry Brands a
leader in the accessories marketplace."
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 (877)
870-4263 in the U.S., (855) 669-9657 in Canada and +1 (412) 317-0790 internationally
until five minutes before starting time. To listen via the
Internet, log on at:
http://www.videonewswire.com/event.asp?id=97786.
Replays of the call will be available several hours after its
completion. The audio replay can be accessed through 9 a.m. on Feb. 18,
2014, by calling (877) 344-7529 in the U.S. or (412)
317-0088 internationally and using passcode 10039882. A written
transcript and audio replay of the call will be posted for at least
12 months at the Investor Room section of our website.
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
current softness in the retail markets; the impact of general
economic conditions on consumer spending; the highly seasonal
nature of our footwear business; inaccurate forecasting of consumer
demand; difficulties liquidating excess inventory; disruption of
our supply chain or distribution networks; the impact of the loss
of key management; 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; 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 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 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 subsequent news releases and filings with
the SEC should also be considered.
–financial charts follow–
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R.G. BARRY
CORPORATION AND SUBSIDIARIES
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CONSOLIDATED
STATEMENTS OF INCOME
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(in thousands of
dollars, except for per share data)
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Thirteen
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Thirteen
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Twenty-Six
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Twenty-Six
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Weeks
Ended
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Weeks
Ended
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Weeks
Ended
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Weeks
Ended
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(unaudited)
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(unaudited)
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% Increase
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(unaudited)
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(unaudited)
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% Increase
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December 28,
2013
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December 29,
2012
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Decrease
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December 28,
2013
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December 29,
2012
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Decrease
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Net sales
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$
47,997
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$
48,505
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-1.0%
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$
89,908
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$
95,737
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-6.1%
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Cost of
sales
|
27,514
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27,951
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-1.6%
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49,953
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54,266
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-7.9%
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Gross
profit
|
20,483
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20,554
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-0.3%
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39,955
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41,471
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-3.7%
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Gross profit (as percent of
net sales)
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42.7%
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42.4%
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44.4%
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43.3%
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Selling, general and
administrative expenses
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10,799
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11,930
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-9.5%
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22,681
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22,921
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-1.0%
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Operating profit
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9,684
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8,624
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12.3%
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17,274
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18,550
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-6.9%
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Other
income
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363
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|
242
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726
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465
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Interest (expense),
net
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(136)
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(175)
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-22.3%
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(275)
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(351)
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-21.7%
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Earnings, before income
taxes
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9,911
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8,691
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14.0%
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17,725
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18,664
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-5.0%
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Income tax
expense
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3,797
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3,390
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12.0%
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6,848
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7,229
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-5.3%
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Net
earnings
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$
6,114
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$
5,301
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15.3%
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$
10,877
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$
11,435
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-4.9%
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Earnings per common
share
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Basic
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$
0.53
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$
0.47
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12.8%
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$
0.95
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$
1.01
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-5.9%
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Diluted
|
$
0.53
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$
0.46
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15.2%
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$
0.94
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$
0.99
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-5.1%
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Weighted average
number of common shares outstanding
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Basic
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11,484
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11,372
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11,440
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11,327
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Diluted
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11,567
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11,564
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11,541
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11,526
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CONSOLIDATED
BALANCE SHEETS
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(in thousands
of dollars)
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(unaudited)
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(unaudited)
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|
|
(unaudited)
|
|
|
|
|
|
December 28,
2013
|
|
December 29,
2012
|
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June 29,
2013
|
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ASSETS
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Cash &
short-term investments
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$
43,598
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$
41,415
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$
39,500
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Accounts receivable,
net
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20,640
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|
19,481
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|
|
16,755
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Inventory
|
21,734
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|
19,829
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24,239
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Prepaid expenses and
other current assets
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3,948
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2,932
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3,670
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Total
current assets
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89,920
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83,657
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84,164
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Net property, plant
and equipment
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4,060
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4,136
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4,178
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Other
assets
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41,148
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44,150
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41,911
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Total
assets
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$
135,128
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$
131,943
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$
130,253
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LIABILITIES &
SHAREHOLDERS' EQUITY
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Accounts
payable
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8,071
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8,654
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10,655
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Other current
liabilities
|
9,866
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10,634
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9,185
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Total current liabilities
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17,937
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19,288
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19,840
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Long-term
debt
|
13,929
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|
18,214
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|
|
|
16,071
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Accrued retirement
costs and other
|
6,771
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|
10,811
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|
|
|
7,165
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|
|
|
|
Shareholders' equity,
net
|
96,491
|
|
83,630
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|
|
|
87,177
|
|
|
|
|
Total
liabilities & shareholders' equity
|
$
135,128
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|
$
131,943
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|
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$
130,253
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SOURCE R.G. Barry Corporation