Haggar Increases FY 2003 Core Earnings Per Share 19% From FY 2002
And Net Sales Exceed Street Expectations DALLAS, Nov. 4
/PRNewswire-FirstCall/ -- Fourth Quarter and Annual Highlights: --
Grew core earnings per share 19% for the year to $1.18 in fiscal
2003 from $0.99 in fiscal 2002. -- Improved core earnings per share
in fiscal fourth quarter by 60% to $0.64 in 2003 from $0.40 in
2002. -- Outstanding performance from two new exciting products in
2003: the Haggar(R) comfort fit waist pant product and the Freedom
Khaki(TM). -- Successfully launched a new pants license with
Kenneth Cole during the fourth quarter of fiscal 2003. --
Introduced a new women's comfort fit waist pant product at major
retailers. -- Reduced debt by 63% to $9.3 million at September 30,
2003 from $25.1 million at September 30, 2002. Haggar Corp.
(NASDAQ:HGGR) announced results for the fourth quarter and full
year for fiscal year 2003, which ended September 30, 2003. Actual
net income for the fourth quarter of fiscal 2003 was $7,327,000, or
$1.12 earnings per diluted share, as compared to actual net income
of $3,543,000 for the fourth quarter of fiscal 2002, or $0.55
earnings per share. For the fourth quarter of fiscal 2003, Haggar
reported a 60% increase in core earnings per diluted share to
$0.64, or $4,192,000 in core earnings. This compares to the fourth
quarter of 2002, in which the Company reported core earnings per
diluted share of $0.40, or $2,574,000 in core earnings. Net sales
for the fourth quarter of fiscal 2003 were $125,546,000 versus
$133,226,000 in the fourth quarter of fiscal 2002. Actual net
income for the full year of 2003 was $9,856,000, or $1.53 earnings
per diluted share, as compared to a net loss for 2002 of $7,565,000
or $1.17 loss per share. For the full year of 2003, Haggar reported
a 19% increase in core earnings per diluted share to $1.18 in 2003,
or $7,599,000 in core earnings. This compares to 2002, in which the
Company reported core earnings per diluted share of $0.99, or
$6,350,000 in core earnings. Net sales for the full year of 2003
were $482,375,000 versus $481,831,000 in 2002. Earnings Summary
(unaudited) (in thousands, except per share amounts) Three Months
Ended Twelve Months Ended September 30, September 30, 2003 2002
2003 2002 Actual net income (loss) $7,327 $3,543 $9,856 $(7,565)
Actual net income (loss) per common share - Diluted $1.12 $0.55
$1.53 $(1.17) Unusual charges (benefits) net of tax: Gain on sale
of global headquarters, net (3,225) --- (3,225) --- Reduction in
force 90 625 90 625 Proxy defense costs --- --- 752 --- Gain on
Sale of Edinburg, Texas facility --- --- (203) --- Legal settlement
on landlord dispute --- --- 329 --- Reduction of legal reserve ---
(1,947) --- (1,947) Closure of Dominican Republic sewing facility
--- 353 --- 353 Revision of Edinburg, Texas facility write-off ---
--- --- (1,294) Closure of cutting facility --- --- --- 600 Impact
of SFAS No.142 (goodwill and other intangible assets) --- --- ---
15,578 Core earnings $4,192 $2,574 $7,599 $6,350 Core earnings per
share - Diluted $ 0.64 $0.40 $ 1.18 $ 0.99 Weighted average shares
outstanding - Diluted 6,529 6,443 6,453 6,429 Review of Core
Earnings: J. M. Haggar, III, the Company's Chairman and Chief
Executive Officer, stated, "We are excited about our performance
for 2003. Our new products at retail are working effectively in
driving value for our customers and the consumer, particularly our
new Haggar(R) comfort fit waist pant, as well as our stain
resistant wrinkle-free product, the Freedom Khaki(TM). Pricing
pressures continue to impact our gross margins, but we remain
committed to our strategy of growing market share." Frank Bracken,
President and Chief Operating Officer, noted, "New innovative
products for the Haggar(R) brand, our Horizon Group (private label)
and the Claiborne(R) brand continue to fuel the success of the
Company and are the cornerstone of our successful history in the
apparel business. Additionally, the Kenneth Cole licensed product
hit stores in August with smashing success at retail. Both Kenneth
Cole and Haggar have been pleased with the product reception at
retail. The Haggar women's pant program has recently been
introduced in wide distribution at retail with JCPenney." David
Tehle, Executive Vice President and Chief Financial Officer, noted,
"The Company reduced its debt by 63% to $9.3 million as of the end
of fiscal 2003, as compared to $25.1 million in debt as of the end
of fiscal 2002, due to the Company's excellent supply chain
management and improved collections." The Haggar Board of Directors
continued the $0.05 per share quarterly dividend. The dividend will
be payable on November 17, 2003, to shareholders of record as of
November 3, 2003. The Company will file a Form 8-K with the
Securities and Exchange Commission today with its financial
projections for fiscal 2004 with net sales of $474,000,000 to
$491,000,000 and an earnings per share estimate of $1.09 to $1.28.
The earnings estimate includes $0.08 - $0.10 per share of one-time
costs associated with the global headquarters relocation. Haggar
Clothing Co., a wholly-owned subsidiary of Haggar Corp., is a
leading marketer of men's casual and dress apparel and women's
sportswear, with global headquarters in Dallas, TX. Haggar markets
in the United States, United Kingdom, Canada, Mexico, and
Indonesia. Haggar also holds exclusive licenses to use the
Claiborne(R) trademark in the United States to manufacture, market,
and sell men's shorts and pants and to use the Kenneth Cole New
York(R) and Reaction Kenneth Cole(R) trademark throughout the
United States to manufacture, distribute and sell men's tailored
dress pants and men's classification dress and casual pants and
shorts in men's classification pant departments. For more
information visit the Haggar website at http://www.haggarcorp.com/
. The statements contained in this release that are not historical
facts are forward-looking statements. These forward-looking
statements are subject to known and unknown risks, uncertainties
and assumptions that could cause actual results to differ
materially from those anticipated or implied by the forward-
looking statements; the results could be affected by, among other
things, general business conditions, the impact of competition, the
seasonality of the Company's business, labor relations,
governmental regulations, unexpected judicial decisions, and
inflation. In addition, the financial results for the quarter just
ended do not necessarily indicate the results that may be expected
for any future quarters or for any fiscal year. Investors also
should consider other risks and uncertainties discussed in
documents filed by the Company with the Securities and Exchange
Commission. Given these uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. The
Company undertakes no obligation to update any such statements or
publicly announce any updates or revisions to any of the
forward-looking statements contained herein to reflect any change
in the Company's expectations with regard thereto or any changes in
events, conditions, circumstances or assumptions underlying such
statements. Use of Non-Generally Accepted Accounting Principles
(Non-GAAP) Financial Information The Company reports its financial
results in accordance with GAAP. However, the Company uses core
earnings as a non-GAAP performance measure to provide both
management and investors a more complete understanding of the
Company's underlying operational results. This non-GAAP measure is
an indicator management uses to provide additional meaningful
comparisons between current results and prior reported results, and
as a basis for planning and forecasting for future periods. Core
earnings is calculated by taking actual net income (loss) and
adjusting that amount for unusual charges or benefits (based on
management's interpretation) which are calculated net of tax. The
presentation of core earnings is not meant to be considered in
isolation or as a substitute for comparable metrics prepared in
accordance with GAAP in the United States. HAGGAR CORP. Condensed
Consolidated Three Months Ended Year Ended Statements of Operations
September 30, September 30, 2003 2002 2003 2002 (In thousands,
except per share amounts) Net sales $ 125,546 $ 133,226 $ 482,375 $
481,831 Cost of sales 90,984 94,560 353,091 351,704 Reorganization
costs --- (2,655) --- (3,812) Gross profit 34,562 41,321 129,284
133,939 Selling, general and administrative expenses (29,221)
(34,521) (119,300) (118,442) Royalty income 541 421 1,593 1,326
Other income 6,085 49 6,687 613 Interest expense (563) (792)
(2,535) (3,600) Income before provision for income taxes and
cumulative effect of accounting change 11,404 6,478 15,729 13,836
Provision for income taxes 4,077 2,935 5,873 5,823 Income before
cumulative effect of accounting change 7,327 3,543 9,856 8,013
Cumulative effect of accounting change --- --- --- (15,578) Net
income (loss) $ 7,327 $ 3,543 $ 9,856 $ (7,565) Income per common
share before cumulative effect of accounting change - Basic $ 1.14
$ 0.55 $ 1.53 $ 1.25 - Diluted $ 1.12 $ 0.55 $ 1.53 $ 1.25
Cumulative effect of accounting change per common share - Basic ---
--- --- (2.44) - Diluted --- --- --- (2.42) Net income (loss) per
common share - Basic $ 1.14 $ 0.55 $ 1.53 $ (1.19) - Diluted $ 1.12
$ 0.55 $ 1.53 $ (1.17) Weighted average shares outstanding - Basic
6,442 6,420 6,424 6,385 - Diluted 6,529 6,443 6,453 6,429 Condensed
Consolidated Balance Sheet Sept. 30, 2003 Sept. 30, 2002 Assets (In
thousands) Cash and cash equivalents $ 7,674 $ 4,124 Accounts
receivable, net 56,528 64,284 Inventories 96,627 100,996 Property
held for sale --- 2,157 Deferred tax benefit 10,505 12,087 Other
current assets 3,557 2,766 Total current assets 174,891 186,414
Property, plant and equipment, net 45,932 46,195 Goodwill 9,472
9,472 Other assets 7,580 7,896 Total Assets $ 237,875 $ 249,977
Liabilities and Stockholders' Equity Accounts payable $ 25,913 $
30,542 Accrued liabilities 31,898 35,669 Accrued wages and other
employee compensation 7,228 6,713 Current portion of long-term debt
3,671 3,742 Total current liabilities 68,710 76,666 Other
non-current liabilities 10,077 8,247 Long term debt 5,671 21,343
Stockholders' equity 153,417 143,721 Total Liabilities and
Stockholders' Equity $ 237,875 $ 249,977 DATASOURCE: Haggar Corp.
CONTACT: David Tehle, Executive Vice President and Chief Financial
Officer of Haggar Corp., +1-214-956-4511, or fax, +1-214-956-4446
Web site: http://www.haggarcorp.com/
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