G-III Apparel Group reported first quarter net sales of $16.5 million and a net loss of $4.8 million, or 68 cents per share, compared to net sales of $18.7 million and a net loss of $2.6 million, or 38 cents per share, during the comparable period last year.
The Company noted that the quarter over quarter changes in net sales and gross profit resulted, as anticipated, from weaker sales of its fashion sports apparel. The Company continues to expect that results of operations for the second quarter will be similarly impacted.
Morris Goldfarb, G-III's Chief Executive Officer, said, “We are pleased to announce a two year renewal, effective April 1, 2005, of our license with NFL Properties to continue to manufacture and market a comprehensive line of adult outerwear in the United States under a variety of NFL trademarks. In addition, we have signed new licensed apparel and outerwear programs and continue to seek new opportunities. We have added licenses with NASCAR for active wear and outerwear for men, women, and juniors, and with World Poker Tour for men's and women's casual sportswear and outerwear. In addition, we have become the exclusive men's and women's licensee for The Yard, a branding program launched by the Collegiate Licensing Company dedicated to the tradition, culture, and aspiration of historically black colleges and universities. Each of these new programs will leverage existing infrastructure. While they will require some time and attention to ramp up, we believe that each has the potential to contribute additional sales volume and profitability to our results.”
Mr. Goldfarb continued, “The first half of this year will see us post disappointing earnings compared to last year, largely as a result of the weakened market for our fashion sports apparel. We are cautiously optimistic about the second half of the year and expect earnings for our second half to be better than last year. However, the improvements in the second half will likely not be sufficient for us to report improved results for the entire year. We remain focused on the strategic development of our business and the continued diversification of our product offerings as we build for the future.”
For the second quarter ending July 31, 2004, the Company is forecasting net sales of approximately $35.0 million and a net loss per share between $0.15 and $0.20. In last year's second quarter, net sales were $45.3 million and diluted net income per share was $0.37.
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
(NASDAQ:GIII)
CONSOLIDATED STATEMENTS OF OPERATIONS AND
SELECTED BALANCE SHEET DATA
(in thousands, except share and per share amounts)
(Unaudited)
First Quarter Ended
April 30,
---------------------
(Unaudited)
2004 2003
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Net sales $16,521 $18,712
Cost of sales 14,759 14,358
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Gross profit 1,762 4,354
Selling, general and administrative expenses 10,157 8,759
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Operating loss (8,395) (4,405)
Interest and financing charges, net 73 48
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Loss before income taxes (8,468) (4,453)
Income tax benefit (3,641) (1,826)
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Net loss $(4,827) $(2,627)
========== ==========
Net loss per common share:
Basic and Diluted $(0.68) $(0.38)
========== ==========
Weighted average number of common shares
outstanding 7,118,871 6,875,830
Balance Sheet Data:
Working Capital $53,182 $44,687
Cash 15,731 3,537
Inventory 26,588 31,201
Total Assets 73,375 65,659
Outstanding Borrowings 770 770
Total Shareholders' Equity $60,776 $53,142
