Haggar Announces Sales Increase of 8.3% for the 3rd Quarter of
Fiscal 2004 DALLAS, July 27 /PRNewswire-FirstCall/ -- Haggar Corp.
(NASDAQ:HGGR) announced results for the three and nine months ended
June 30, 2004. Actual net income and core earnings for the third
quarter of fiscal 2004 were $1.7 million, or $0.23 per diluted
share, as compared to actual net income and core earnings of $2.7
million for the third quarter of fiscal 2003, or $0.42 per diluted
share. Net sales for the third quarter increased $8.9 million, or
8.3%, to $116.3 million, as compared to $107.4 million for the
three months ended June 30, 2003. The decrease in earnings per
share for the third quarter of fiscal 2004 was primarily due to
increased selling, general and administrative expenses resulting
from a strategic shift in the timing of advertising programs and
increased volume expenses consistent with an increase in sales.
Gross profit also decreased during the period primarily due to the
timing of lower-margin closeout sales. Actual net income for the
nine months ended June 30, 2004 was $5.5 million, or $0.79 per
diluted share, as compared to net income for the nine months ended
June 30, 2003 of $2.5 million or $0.39 per diluted share. For the
nine months ended June 30, 2004, Haggar reported a 15.2% increase
in core earnings per diluted share to $0.91, or $6.3 million in
core earnings. This compares to the nine months ended June 30,
2003, in which the Company reported core earnings per diluted share
of $0.79, or $5.1 million in core earnings. The increase in core
earnings is primarily due to strong gross profit for the men's wear
divisions, improved gross profit for the women's wear division and
increased sales and gross profit at the Company's retail stores.
Earnings Summary (unaudited) (in thousands, except per Three Months
Ended Nine Months Ended share amounts) June 30, June 30, 2004 2003
2004 2003 Actual net income $1,670 $2,704 $5,526 $2,530 Actual net
income per common share - Diluted $0.23 $0.42 $0.79 $0.39 Unusual
charges (benefits) net of tax: Relocation of global headquarters
--- --- 509 --- Wrongful termination lawsuit --- --- 309 --- Proxy
defense costs --- --- --- 702 Legal settlement on landlord dispute
--- --- --- 307 Gain on sale of Edinburg, Texas facility --- ---
--- (190) Strategic media advertising --- --- --- 1,755 Core
earnings $1,670 $2,704 $6,344 $5,104 Core earnings per common share
- Diluted $0.23 $0.42 $0.91 $0.79 Weighted average shares
outstanding - Diluted 7,157 6,418 6,962 6,427 J. M. Haggar, III,
the Company's Chairman and Chief Executive Officer, stated, "We are
excited by the improved gross margins at our retail stores as well
as the success of new programs such as our Kenneth Cole(R) licensed
products and our Haggar(R) branded comfort equipped pants for
women. These successes have contributed to our gross profit and
core earnings growth on a year-to-date basis." Frank Bracken,
President and Chief Operating Officer, added, "The Company is well
positioned for the upcoming fall and holiday season with exciting
and innovative products that are meeting consumer needs. We are
looking forward to a new product launch entitled 'ForeverNew(TM)',
a line of casual and dress pants and sport shirts that won't fade,
shrink, wrinkle or stain. This launch is being supported by a fully
integrated national consumer marketing campaign including TV,
radio, magazines and in-store displays that show consumers how
Haggar(R) ForeverNew(TM) clothes still look great, even after
multiple washes." John Feray, Chief Financial Officer, commented,
"The Company has strengthened its financial position during fiscal
2004. We have reduced our outstanding debt to $5.7 million as of
June 30, 2004 from $9.3 million as of June 30, 2003, and have
increased our cash on hand to $20.7 million as of June 30, 2004
from $13.0 million as of June 30, 2003." The Haggar Board of
Directors continued the $0.05 per share quarterly dividend. The
dividend will be payable on August 23, 2004, to shareholders of
record as of August 9, 2004. The Company will file a Form 8-K with
the Securities and Exchange Commission today with its updated
financial projections for fiscal 2004. The Company has revised
quarterly and annual earnings per share projections due to an
increase in dilutive shares. 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, the United
Kingdom, Canada, Mexico, and Indonesia. Haggar also holds exclusive
licenses in the United States to use the Claiborne(R), Kenneth Cole
New York(R), and Kenneth Cole Reaction(R) trademarks to
manufacture, market, and sell men's shorts and pants in men's
classification pant departments. For more information visit the
Haggar website at http://www.haggar.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
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 Nine Months Ended Statements of
Operations June 30, June 30, 2004 2003 2004 2003 (Unaudited, in
thousands, except per share amounts) Net sales $116,347 $107,435
$356,146 $356,828 Cost of sales 84,109 76,166 255,690 262,106 Gross
profit 32,238 31,269 100,456 94,722 Selling, general and
administrative expenses (29,368) (26,556) (91,429) (90,079) Royalty
income 255 378 854 1,052 Other income (30) 102 369 603 Interest
expense (393) (570) (1,309) (1,973) Income before provision for
income taxes 2,702 4,623 8,941 4,325 Provision for income taxes
1,032 1,919 3,415 1,795 Net income 1,670 2,704 5,526 2,530 Net
income per common share -Basic 0.24 0.42 0.81 0.39 -Diluted 0.23
0.42 0.79 0.39 Weighted average shares outstanding -Basic 7,049
6,418 6,810 6,418 -Diluted 7,157 6,418 6,962 6,427 Condensed
Consolidated Balance Sheet June 30, 2004 September 30, 2003
(Unaudited) Assets (In thousands) Cash and cash equivalents $20,687
$7,674 Accounts receivable, net 51,790 56,528 Inventories 96,164
96,959 Deferred tax asset 10,505 10,505 Other current assets 5,116
3,557 Total current assets 184,262 175,223 Property, plant and
equipment, net 44,559 45,932 Goodwill, net 9,472 9,472 Other assets
7,142 7,580 Total assets $245,435 $238,207 Liabilities and
Stockholders' Equity Accounts payable $20,837 $26,245 Accrued
liabilities 35,373 31,898 Other current liabilities 6,167 7,228
Current portion of long-term debt 3,673 3,671 Total current
liabilities 66,050 69,042 Other non-current liabilities 11,305
10,077 Long-term debt 2,000 5,671 Stockholders' equity 166,080
153,417 Total liabilities and stockholders' equity $245,435
$238,207 DATASOURCE: Haggar Corp. CONTACT: John Feray, Chief
Financial Officer of Haggar Corp., +1-214-956-4511, or fax,
+1-214-956-4446 Web site: http://www.haggar.com/
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