Everlast Worldwide Inc. reported second quarter net sales were $12.9 million as compared to $14.7 million reported in 2002. Net licensing revenues advanced 11.8% to $1.6 million. Net income available to common stockholders (after giving effect to the redeemable preferred stock dividend) was $.1 million, or $0.04 per basic share, compared with $.2 million, or $0.08 per basic share, in 2002.
For the six months ended June 30, 2003, net sales were $25.3 million as compared to $30.4 million in 2002. During the six months, net licensing increased 15.4% to $3.2 million. Net income available to common stockholders (after giving effect to the redeemable preferred stock dividend) was $.1 million, or $0.04 per basic share, compared with $.6 million, or $0.20 per basic share, in 2002.
“The challenges posed by the economy along with unfavorable weather conditions throughout most of the U.S. in the second quarter forced retailers to continue their cautious stance and thus, reduced orders. However, against this difficult backdrop, we posted positive operating results for the quarter,” said George Q. Horowitz, Chairman and Chief Executive of Everlast Worldwide Inc. “During the quarter, we continued to enhance the Everlast brand and expand our product portfolio, develop new manufacturing efficiencies, and execute our long-term growth strategies.”
Mr. Horowitz continued, “While the current environment has been challenging, we continue to see opportunities that will position the company for long-term profitable growth. This is evidenced by our recent new product development and new licensing activities particularly in the area of nutritional products, health and beauty aids for men and women, as well as consumer non-durables. We also expanded our presence in the important children's apparel segment through a number of licensing agreements. We are positioned to capitalize on consumer demand for niche market brands such as Everlast.”
Mr. Horowitz concluded, “Regardless of what the balance of the year holds in terms of the economy, we remain committed to our brand building activities and product expansion efforts. Licensing the Everlast brand in important product categories will remain a corporate priority and we have identified a number of market segments, which hold great promise for us. Our flagship apparel line will be updated with new styles and products. The stature of our boxing brand will continue to grow as we unfold new event sponsorship activities in the coming months. We will also continue to support the Everlast brand name with unique and impactful advertising and merchandising efforts. We are now looking forward to leveraging the strategic progress we have made to deliver strong returns and enhanced value for our shareholders.”
EVERLAST WORLDWIDE INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $12,939,061 $14,725,911 $ 25,294,344 $ 30,460,507
Cost of goods sold 9,386,797 10,144,052 18,306,839 20,604,882
Gross profit 3,552,264 4,581,859 6,987,505 9,855,625
Net license revenues 1,586,415 1,418,950 3,235,251 2,803,617
5,138,679 6,000,809 10,222,756 12,659,242
Operating expenses:
Selling and shipping 2,795,667 3,079,581 5,832,111 5,882,041
General and
administrative 1,550,477 1,354,123 2,937,341 3,081,265
Amortization 228,168 228,168 456,336 456,336
4,574,312 4,661,872 9,225,788 9,419,642
Income from operations 564,367 1,338,937 996,968 3,239,600
Other income (expense):
Interest expense (238,297) (168,478) (475,209) (319,580)
Investment income 15,259 7,047 27,906 13,658
(223,038) (161,431) (447,303) (305,922)
Income before provision
for income taxes 341,329 1,177,506 549,665 2,933,678
Provision for income
taxes 110,465 588,242 285,825 1,400,432
Net income $ 230,864 $ 589,264 $ 263,840 $ 1,533,246
Redeemable preferred
stock dividend 119,705 349,191 136,805 908,586
Net income available to
common stockholders $111,159 $240,073 $127,035 $624,660
Basic earnings per share $0.04 $0.08 $.04 $.20
