Mossimo, Inc. reported third quarter 2003 revenue of $4.2 million compared to $4.3 million for the same period last year. The Company also reported second quarter 2003 net earnings of $630,000, compared to $1.6 million for the same period last year, and diluted earnings per share were $0.04 compared to $0.10 for the same period last year.
Pre-tax net earnings were $1.1 million, or $0.07 per diluted share in the third quarter of 2003, compared to pre-tax net earnings of $1.4 million, or $0.09 per diluted share in the third quarter of 2002.
Revenues for the nine months ended September 30, 2003 were $16.9
million compared to $17.3 million in the same period last year.
Included in the 2002 revenue was non-recurring revenue of $1.5
million, which had been previously deferred by the Company pending the
results of a royalty audit that was completed last year. Excluding the
non-recurring revenue, the Company reported a 7% increase in revenue
for the first nine months of 2003 compared to 2002. The Company
reported net earnings for the nine months ended September 30, 2003 of
$3.9 million, or $0.25 per diluted share, compared to net earnings of
$8.3 million, or $0.53 per diluted share for the nine months ended
September 30, 2002. The non-recurring revenue also increased the nine
months net earnings by $600,000, or $0.04 per diluted share in 2002.
Recurring pre-tax net earnings were $6.5 million, or $0.41 per diluted
share in the first nine-months of 2003 compared to recurring pre-tax
net earnings of $7.5 million, or $0.48 per diluted share in the first
nine-months of 2002. Recurring pre-tax net earnings in 2002 is
calculated by subtracting the $600,000 effect of non-recurring revenue
from earnings before income taxes of $8.1 million as reported under
generally accepted accounting principles.
The Company is now reporting income tax expense for book purposes
after having recorded a deferred tax asset as of December 31, 2002 to
recognize the income tax benefit of previous net operating losses. In
accordance with FAS – 109, the income tax expense for book purposes is
based on the expected blended effective rate for federal and state
taxes of approximately 40%. While this income tax expense reduces net
earnings, it is important to note that no cash taxes are expected to
be paid, other than alternative minimum tax (AMT) and certain local
and state taxes until the tax credits have been fully utilized.
Mossimo Giannulli, Chairman and Chief Executive Officer of
Mossimo, Inc commented, “Our third quarter results were in line with
expectations, despite a challenging retail environment. We remain
focused on enhancing our design and merchandising initiatives and we
are optimistic about our prospects for the future.”
Mr. Giannulli, concluded, “We continue to execute on a variety of
strategies to enhance the value and appeal of our brand and improve
our operating platform for the future. The results of these programs
are encouraging, however, we believe we have the opportunity to make
further progress and we are dedicated to fully capitalizing on our
unique position in the marketplace.”
MOSSIMO, INC.
CONDENSED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Unaudited
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2003 2002 2003 2002
------- ------- ------- -------
Revenue from license
royalties and design
service fees $ 4,176 $ 4,287 $16,902 $17,281
Operating expenses:
Selling, general and
administrative 3,144 2,797 10,444 8,890
------- ------- ------- -------
Operating earnings 1,032 1,490 6,458 8,391
Other (income) expense:
Other income, net -- -- -- (24)
Interest (income)
expense, net (18) 70 4 299
------- ------- ------- -------
Earnings before
income taxes 1,050 1,420 6,454 8,116
Income taxes expense
(benefit) 420 (195) 2,580 (195)
------- ------- ------- -------
Net earnings $ 630 $ 1,615 $ 3,874 $ 8,311
======= ======= ======= =======
Earnings per common
share:
Basic $ 0.04 $ 0.10 $ 0.25 $ 0.54
======= ======= ======= =======
Diluted $ 0.04 $ 0.10 $ 0.25 $ 0.53
