R.G. Barry Corporation, the owner of Dearfoams, Baggallini and Foot Petals, reported a 12.0 percent increase in sales in its second quarter ended Dec. 31, to $55.6 million versus $49.7 million one year ago. Net earnings surged 47.3 percent to $6.4 million, or 56 cents per share, up from $4.3 million, or 38 cents, in the second quarter of fiscal 2011.
Improved gross profit as a percent of sales at 41.4 percent compared to 34.7 percent in the equivalent quarter last year.
On a consolidated basis for the first half, the company reported:
- A net sales increase of 23.2 percent to $105.8 million from $85.9 million in the first half one year ago;
- Net earnings improvement of 57.3 percent at $13.2 million, or $1.17 per diluted share, versus net earnings of $8.4 million, or $0.75 per diluted share, in the analogous period of fiscal 2011;
- Gross profit as a percent of net sales rose to 42.8 percent from 36.6 percent in the comparable six months of fiscal 2011; and
- Selling, general and administrative expenses of $23.3 million were basically flat as a percentage of net sales at 22.0 percent, versus $18.3 million, or 21.3 percent of net sales in the equivalent period last year.
The company's balance sheet reflected:
Cash and short-term investments of $36.2 million compared to $45.6 million one year ago;
Consolidated inventory of $18.9 million, comprised of footwear inventory of $12.5 million, or about $3.6 million less than in the comparable period of fiscal 2011; and $6.4 million in inventory related to the accessories businesses acquired last year; and
Net shareholders' equity of $75.3 million, up from $62.1 million at the end of the first half of fiscal 2011.
“We achieved our first-half performance and profit objectives, despite a demanding retail environment during the key Christmas selling season,” said Greg Tunney, president and chief executive officer. “Footwear, which is the largest component of our business and heavily tied to Christmas selling, fully met our revenue and profit expectations for the first half. We also benefitted from the accretive nature and richer margins of our accessories business units, which performed as we had planned.”
“Strong consolidated operating results in the first half have continued to validate our evolving business model,” added Jose Ibarra, senior vice president finance and chief financial officer. “Increased revenues, gross profit, operating margins and cash generation all reflect the benefit of the changes made to our operating model. Our financial strength continues to grow. Less than 12 months after acquiring our two accessories business units, we have returned to a positive net cash position. The quality and level of our consolidated inventories at the half is properly aligned to support our revenue expectations for the remainder of fiscal 2012.”
Tunney added, “We have successfully refocused our core business on the Dearfoams brand and fully integrated the Foot Petals and baggallini acquisitions made last year. We have now reinitiated our search for accessories category businesses that can help us achieve our long-term growth and profitability objectives. We have both the financial structure and business discipline to identify and acquire brands that will allow us to continue our evolution into a leading year-round provider of a variety of functional and fashionable accessories category products.”
R.G. BARRY CORPORATION AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
(in thousands of dollars, except for per share data) | ||||||||||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||
(unaudited) | (unaudited) | % Increase | (unaudited) | (unaudited) | % Increase | |||||||
December 31, 2011 | January 1, 2011 | Decrease | December 31, 2011 | January 1, 2011 | Decrease | |||||||
Net sales | $ 55,599 | $ 49,660 | 12.0% | $ 105,829 | $ 85,929 | 23.2% | ||||||
Cost of Sales | 32,602 | 32,431 | 60,579 | 54,503 | ||||||||
Gross profit | 22,997 | 17,229 | 33.5% | 45,250 | 31,426 | 44.0% | ||||||
Gross profit (as percent of net sales) | 41.4% | 34.7% | 42.8% | 36.6% | ||||||||
Selling, general and administrative expenses | 12,415 | 10,537 | 17.8% | 23,295 | 18,309 | 27.2% | ||||||
Operating profit | 10,582 | 6,692 | 58.1% | 21,955 | 13,117 | 67.4% | ||||||
Other income | 88 | 84 | 175 | 193 | ||||||||
Interest (expense) income, net | (189) | 14 | (444) | 43 | ||||||||
Earnings, before income taxes | 10,481 | 6,790 | 54.4% | 21,686 | 13,353 | 62.4% | ||||||
Income tax expense | 4,130 | 2,478 | 8,445 | 4,937 | ||||||||
Net earnings | $6,351 | $4,312 | 47.3% | $13,241 | $8,416 | 57.3% | ||||||
Earnings per common share | ||||||||||||
Basic | $ 0.57 | $ 0.39 | 46.2% | $ 1.19 | $ 0.76 | 56.6% | ||||||
Diluted | $0.56 | $0.38 | 47.4% | $1.17 | $0.75 | 56.0% | ||||||
