Kellwood Company Q4 net sales totaled $491.9 million, as compared to $446.5 million in the fourth quarter last year. Net earnings from continuing operations were $6.5 million, or 25 cents per diluted share, versus $4.1 million, or 16 cents per diluted share, last year.

Included in net earnings from continuing operations for the current quarter were restructuring and other non-recurring charges of $4.9 million (after tax), or $0.19 per diluted share versus $2.1 million (after tax), or $0.08 per diluted share, last year associated with the Company's previously announced strategic restructuring initiatives. The Company has completed the previously announced restructuring initiatives.

Total net earnings were $7.0 million, or 27 cents per diluted share, versus $12.5 million, or 49 cents per diluted share, in the fourth quarter last year. Included in total net earnings for the fourth quarter were net earnings from discontinued operations of $0.4 million, or $0.02 per diluted share, versus $8.4 million, or $0.33 per diluted share, last year.

On an ongoing basis (continuing operations excluding the restructuring and other non-recurring charges), net sales were $491.9 million as compared to $446.5 million in the fourth quarter last year. Net earnings were $11.4 million, or $0.44 per diluted share, compared to $6.2 million, or $0.24 per share – an 83% increase in diluted earnings per share. Included in net earnings for the 2006 quarter were $0.5 million before tax, $0.3 million after tax, or $0.01 per diluted share, of stock option expense related to the adoption of FAS 123R “Share-Based Payment”, a new accounting pronouncement requiring the expensing of stock-based compensation.

The Company achieved a 10% rise in net sales driven by broad based organic sales growth across all business segments and the acquisition of Vince®. An increase in gross profit as a percent of net sales combined with the improvement in net sales enabled net earnings and earnings per share on an ongoing basis to exceed last year despite higher selling, general and administrative costs. Gross profit as a percentage of net sales rose by 170 basis points from last year to 21.2%, primarily due to improved performance at retail by many of the Company's brands, which resulted in lower markdowns. Selling, general and administrative costs increased, among other reasons, due to the addition of 18 new retail stores, the acquisition of Vince, higher marketing spend and activities to fund the Company's strategic initiatives. Operating earnings (gross profit less selling, general & administrative expense before stock option expense, amortization and restructuring and other non-recurring charges) as a percent of net sales rose by 150 basis points from last year to 5.1%.

“The fourth quarter marks the third consecutive quarter of year-to-year improvement in gross margin and better bottom line profitability,” stated Mr. Skinner. “This demonstrates that our efforts to revitalize our core brands, increase our penetration of brands serving the better market and improve business processes are gaining traction with the consumer and producing tangible results for Kellwood. As we begin fiscal 2007, we remain focused on continuing to position our brands for sustainable growth. While encouraged by the consumer response to Sag Harbor® women's sportswear and Calvin Klein women's better sportswear lines, we are not yet satisfied and expect our upcoming offerings to translate into continued improvements in our business performance in the future.”

The Other Soft Goods division, which includes American Recreation, continued to produce excellent results in the fourth quarter of 2006 achieving a 9% increase in net sales to $84.5 million. Growth was realized across both the children's and recreation product categories. Operating earnings (gross profit less selling, general & administrative expense before stock option expense, amortization and restructuring and other non-recurring charges) grew 7% to $9.4 million in the fourth quarter of 2006. Operating earnings as a percentage of net sales was relatively flat with last year at 11.1%.

Net sales for fiscal 2006 totaled $1.962 billion, flat with last year. Net earnings from continuing operations for fiscal 2006 were $21.1 million, or $0.82 per diluted share, versus $18.8 million, or $0.69 per diluted share, last year. Included in net earnings from continuing operations for fiscal 2006 were restructuring and other non-recurring charges of $21.4 million (after tax), or $0.83 per diluted share versus $35.5 million (after tax), or $1.31 per diluted share last year, associated with the Company's previously announced strategic restructuring initiatives. Partially offsetting these fiscal 2005 charges was a one-time tax benefit for the repatriation of foreign earnings of $13.0 million, or $0.48 per diluted share.

Total net earnings for fiscal 2006 were $31.4 million, or $1.21 per diluted share, versus a net loss of $38.4 million, or $1.42 per diluted share, last year. Included in total net earnings for fiscal 2006 were net earnings from discontinued operations of $10.3 million, or $0.40 per diluted share, versus a net loss of $57.2 million, or $2.11 per diluted share, last year. Results of discontinued operations in fiscal 2006 include a $6.3 million reversal of an allowance for tax exposures no longer deemed necessary.

For fiscal 2006, on an ongoing basis (continuing operations excluding the restructuring and other non-recurring charges), net sales were $1.962 billion as compared to $1.965 billion last year. Net earnings were $42.5 million, or $1.64 per diluted share, compared to $41.3 million, or $1.52 per share last year. Included in the net earnings for fiscal 2006 is $4.3 million before tax, $2.8 million after tax, or $0.11 per diluted share, of stock option expense related to the adoption of FAS 123R “Share-Based Payment”.

Net earnings and earnings per share on an ongoing basis for fiscal 2006 were above last year principally due to higher interest income and fewer shares outstanding partially offset by stock option expense. Gross margin for the current fiscal year was slightly better than the prior year while selling, general and administrative expenses were essentially flat. The Company's effective tax rate was 32.2% for the current fiscal year versus 31.2% for last year.