Haggar Corp. Reports Financial Results for 1st Quarter 2005
February 09 2005 - 4:42PM
PR Newswire (US)
Haggar Corp. Reports Financial Results for 1st Quarter 2005 DALLAS,
Feb. 9 /PRNewswire-FirstCall/ -- Haggar Corp. (NASDAQ:HGGR)
announced results for the first quarter ended December 31, 2004.
For the first quarter of fiscal 2005, Haggar reported a net loss of
$3.3 million on net sales of $100.5 million, or $0.46 loss per
diluted share. This compares to the first quarter of fiscal 2004,
in which the Company reported net income of $1.2 million on net
sales of $107.7 million, or $0.18 net income per diluted share. The
decrease in earnings per share is partly due to an increase in
selling, general and administrative expenses resulting from a $1.7
million pre-tax charge for a wrongful termination lawsuit, or $0.15
loss per diluted share. The decrease is offset slightly by a
reversal of a prior legal reserve due to a favorable outcome
resulting in $0.3 million pre-tax income, or $0.03 gain per diluted
share. Further, the decrease in earnings per share relates to the
selling results of the Company's ForeverNew(TM) products, as
discussed below, and an incremental $2.5 million in marketing
expense related to the Company's ForeverNew(TM) product
introduction. J. M. Haggar, III, the Company's Chairman and Chief
Executive Officer, stated, "The late Fall and Holiday 2004 selling
season at retail did not meet our customers' expectations, and our
latest product innovation, ForeverNew(TM), which we offered at
premium price points, did not perform as well as expected in the
current retail environment resulting in higher customer allowances
for the first quarter of fiscal 2005." Frank Bracken, President and
Chief Operating Officer, added, "Offsetting the disappointment
noted above are our Comfort Equipped(TM) products, which remain
best sellers at retail. In addition, we continue to enjoy a growing
success with our Kenneth Cole and Claiborne product lines and
continue to pursue new product innovations to lead the industry."
John Feray, Senior Vice President and Chief Accounting Officer,
noted, "The Company continues to reduce borrowings and has lowered
its debt from the $5.7 million as of the end of the first quarter
of fiscal 2004 to $2.1 million as of the end of the first quarter
of fiscal 2005. Strong cash flows have allowed for an additional
204,793 shares of treasury stock to be purchased during the first
quarter of 2005." The Haggar Board of Directors continued the $0.05
per share quarterly dividend. The dividend will be payable on March
7, 2005, to shareholders of record as of February 9, 2005. The
Company filed a Form 8-K with the Securities and Exchange
Commission today with its updated quarterly financial projections
for fiscal 2005. The Company previously announced on February 1,
2005 its net income projections for fiscal 2005 would be between
$5.5 million and $7.0 million with projected sales between $447 and
$463 million and earnings per diluted share of $0.81 and $1.01 for
fiscal 2005. The drop in sales and net income from earlier guidance
is primarily because some of the Company's significant customers
took aggressive Holiday markdowns and reduced Spring and Fall 2005
orders on ForeverNew(TM) products. 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) trademark, 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.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. HAGGAR CORP. Condensed Consolidated Three Months Ended
Statements of Operations December 31, (unaudited) 2004 2003 (In
thousands, except per share amounts) Net sales $100,543 $107,735
Cost of goods sold 72,757 76,412 Reorganization costs (321) ---
Gross profit 28,107 31,323 Selling, general and administrative
expenses (33,843) (29,574) Royalty income 355 254 Other income
(expense) 264 371 Interest expense (209) (457) Income (loss) before
provision (benefit) for income taxes (5,326) 1,917 Provision
(benefit) for income taxes (2,061) 732 Net income (loss) (3,265)
1,185 Net income (loss) per common share - Basic and Diluted (0.46)
0.18 Weighted average shares outstanding - Basic 7,072 6,561 -
Diluted 7,072 6,726 Condensed Consolidated Balance Sheet December
31, September 30, 2004 2004 (unaudited) Assets (In thousands) Cash
and cash equivalents $ 24,667 $ 30,667 Accounts receivable, net
35,148 56,132 Inventories 101,138 95,229 Deferred tax asset 11,021
11,021 Other current assets 7,968 7,392 Total current assets
179,942 200,441 Property, plant and equipment, net 44,597 44,394
Goodwill, net 9,472 9,472 Other assets 9,842 7,165 Total assets $
243,853 $261,472 Liabilities and Stockholders' Equity Accounts
payable $ 25,418 $ 30,621 Accrued liabilities 36,256 36,678 Accrued
wages and other employee compensation 2,949 8,538 Current portion
of long-term debt 100 100 Total current liabilities 64,723 75,937
Other non-current liabilities 13,120 12,760 Deferred tax liability
374 374 Long term debt 2,000 2,000 Stockholders' equity 163,636
170,401 Total liabilities and stockholders' equity $ 243,853
$261,472 DATASOURCE: Haggar Corp. CONTACT: John Feray, Senior Vice
President and Chief Accounting Officer of Haggar Corp.,
+1-214-956-4511, or fax, +1-214-956-4446 Web site:
http://www.haggar.com/
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