Hartmarx Reports Improved Third Quarter Revenues and 41% Net
Earnings Increase; Company Again Raises Full Year 2004 Earnings
Guidance CHICAGO, Sept. 29 /PRNewswire-FirstCall/ -- Hartmarx
Corporation (NYSE: HMX) today reported improved operating results
for its third quarter and nine months ended August 31, 2004. Third
quarter revenues were $155.8 million in 2004 compared to $151.6
million in 2003. Net earnings improved to $5.0 million or $.14 per
diluted share in the current period compared to net earnings of
$3.5 million or $.10 per diluted share in the third quarter of
2003. For the nine months, revenues increased 5.9% to $434.8
million from $410.4 million in 2003. Net earnings improved to $10.1
million or $.28 per diluted share compared to net earnings of $5.6
million or $.16 per diluted share in 2003. Homi B. Patel, chairman
and chief executive officer of Hartmarx, commented, "We are
executing well, achieving sales and earnings increases, improved
operating margins and significant debt reduction from efficient
working capital management. For the full year, we continue to
expect a sales increase in the mid single digits. As a result of
anticipating a favorable impact of $.02 to $.03 per diluted share
to fourth quarter earnings from the Misook acquisition, we are once
again increasing our estimate for full year earnings from a 50%
increase over last year to a 55% - 60% increase. Total debt of
$132.5 million at August 31 declined $23.6 million or 15.1% from
the year earlier level, even after reflecting the $32.1 million
cash payment related to the Misook acquisition," Mr. Patel
concluded. Third quarter operating earnings were $9.8 million in
2004 compared to $7.9 million in 2003. The Misook business
contributed $.01 to third quarter earnings per diluted share. For
the nine months, operating earnings improved to $21.3 million from
$15.9 million in 2003. The increase reflected the sales
improvement, including approximately $4 million from the Misook
business, along with a higher year-to-date gross margin rate of
30.6% compared to 29.5% in 2003. Selling, general and
administrative expenses increased $6.5 million on the higher sales,
including the Misook business, representing 26.1% of sales compared
to 26.0% in 2003. Interest expense for the nine months declined to
$4.6 million from $5.5 million in 2003, principally from lower
average borrowing levels. Year- to-date results for 2003 also
included a $.8 million first quarter pre-tax refinancing charge
associated with the January, 2003 early retirement of the then
outstanding 12.5% senior unsecured notes, representing the non-cash
write-off of unamortized debt discount and financing fees. Hartmarx
produces and markets business, casual and golf apparel under its
own brands including Hart Schaffner Marx, Hickey-Freeman, Palm
Beach, Coppley, Cambridge, Keithmoor, Racquet Club, Naturalife,
Pusser's of the West Indies, Royal, Brannoch, Riserva, Sansabelt,
Exclusively Misook, Barrie Pace and Hawksley & Wight. In
addition, the Company has certain exclusive rights under licensing
agreements to market selected products under a number of premier
brands such as Austin Reed, Tommy Hilfiger, Kenneth Cole, Burberry
men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus,
Claiborne, Pierre Cardin, Perry Ellis, Andrea Jovine, Lyle &
Scott and Golden Bear. The Company's broad range of distribution
channels includes fine specialty and leading department stores,
value-oriented retailers and direct mail catalogs. The comments set
forth above contain forward-looking statements made in reliance
upon the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements can
be identified by the use of forward-looking terminology such as
"anticipate," "believe," "continue," "estimate," "expect,"
"intend," "may," "should" or "will" or the negatives thereof or
other comparable terminology. Forward-looking statements are not
guarantees as actual results could differ materially from those
expressed or implied in such forward-looking statements as a result
of certain factors, including those factors set forth in Hartmarx's
filings with the Securities and Exchange Commission ("SEC"). The
statements could be significantly impacted by such factors as the
level of consumer spending for men's and women's apparel, the
prevailing retail environment, the Company's relationships with its
suppliers, customers, licensors and licensees, actions of
competitors that may impact the Company's business, possible
acquisitions and the impact of unforeseen economic changes, such as
interest rates, or in other external economic and political factors
over which the Company has no control. The reader is also directed
to the Company's periodic filings with the SEC for additional
factors that may impact the Company's results of operations and
financial condition. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
HARTMARX CORPORATION --- UNAUDITED FINANCIAL SUMMARY -- (000's
omitted, except per share amounts) Statement of Earnings Three
Months Ended Nine Months Ended August 31, August 31, 2004 2003 2004
2003 Net sales $ 155,783 $ 151,559 $ 434,779 $ 410,373 Licensing
and other income 934 560 1,837 1,532 156,717 152,119 436,616
411,905 Cost of goods sold 108,200 108,505 301,909 289,218 Selling,
general & administrative expenses 38,750 35,736 113,358 106,822
146,950 144,241 415,267 396,040 Operating earnings 9,767 7,878
21,349 15,865 Interest expense 1,512 1,773 4,634 5,540 Refinancing
expense -- -- -- 795 Earnings before taxes 8,255 6,105 16,715 9,530
Tax provision (3,265) (2,565) (6,605) (3,915) Net earnings $4,990
$3,540 $10,110 $5,615 Earnings per share: Basic $ .14 $ .11 $ .29 $
.17 Diluted $ .14 $ .10 $ .28 $ .16 Average shares: Basic 35,285
33,351 34,708 33,195 Diluted 36,459 34,688 36,142 34,246 August 31,
Condensed Balance Sheet 2004 2003 Cash $2,752 $6,027 Accounts
receivable, net 135,579 146,652 Inventories 133,069 137,577 Other
current assets 21,503 18,212 Current Assets 292,903 308,468 Other
assets, including goodwill and intangibles 66,626 29,490 Deferred
taxes 49,875 58,551 Prepaid and intangible pension asset 64,016
58,708 Net fixed assets 28,212 29,446 Total $ 501,632 $484,663
Accounts payable and accrued expenses $97,816 $72,767 Total debt
132,497 156,083 Minimum pension liability 65,428 69,473
Shareholders' equity 205,891 186,340 Total $501,632 $484,663 Book
value per share $5.75 $5.34 Selected cash flow data (year-to-date):
Capital Expenditures $3,243 $1,744 Depreciation of fixed assets
4,188 4,761 Amortization of long-lived assets and unearned employee
benefits 3,186 1,734 This information is preliminary and may be
changed prior to filing Form 10-Q. No investment decisions should
be based solely on this data. Calculation of basic and diluted
shares for the three months and nine months of 2003 have been
revised to reflect the methodology utilized in 2004 related to
restricted stock awards. Basic earnings per share as previously
reported in 2003 were $.10 for the three months and $.16 for the
nine months. DATASOURCE: Hartmarx Corporation CONTACT: Erin Gaffney
of Hartmarx, +1-212-840-4771 Web site: http://www.hartmarx.com/
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