MOSS Mossimo

Mossimo, Inc. (NASDAQ: MOSS) today announced financial results for the second quarter ended June 30, 2006. Mossimo, Inc. reported second quarter 2006 total net revenues increased to $10.3 million compared to $9.0 million for the same period last year. The Company reported second quarter net earnings of $2.71 million compared to net earnings of $2.2 million for the same period last year, and diluted earnings per share of $0.17 compared to diluted earnings per share of $0.14 for the same period last year. Net revenues for the six months ended June 30, 2006 were $15.2 million, net of a one-time $6 million rebate to Target (recognized in the first quarter of 2006 as a reduction in revenue), compared to $17.7 million in the same period last year. The company reported net earnings for the first six months of 2006 of $1.5 million compared to net earnings of $4.0 million in the corresponding period a year ago, and diluted earnings per share of $0.10 compared to diluted earnings per share of $0.26 for the same period last year. As noted above, the six month net revenue and earnings numbers reflect the impact of the previously announced changes to the Company's license agreement with Target, which included a one-time $6 million rebate to Target of previously earned royalties, recognized as a reduction in revenue in the first quarter of 2006. Edwin Lewis, President and Co-Chief Executive Officer stated, "We were pleased with the pace of our business during the quarter, as we registered meaningful gains in our both men's and women's business at Target. With regard to Modern Amusement, we experienced better full-price selling compared to a year ago, and while there is still work to be done, we are encouraged by our recent progress." Founded in 1987, Mossimo, Inc. is a designer, licensor and distributor of men's, women's, boys' and girls' apparel, footwear, and other fashion accessories such as jewelry, watches, handbags and belts. The Company also announced that it has set a record date of August 15, 2006 for the special meeting of stockholders which will be held to vote on the proposed merger in which Iconix brands, Inc. will acquire the Company. The Company expects this meeting to be held in September, 2006 but has not yet set the actual meeting date. The matters discussed in this news release with respect to operations and future results, and the benefits thereof, are forward-looking statements that involve risks and uncertainties, including the demand for the Company's products in Target stores, changes in consumer demands and preferences, shifting trends in the overall retail and apparel market, competition from other lines, changes in consumer spending patterns and general economic conditions, and uncertainties generally associated with product introductions and apparel retailing. Forward-looking statements are not guarantees and involve known and unknown risks and uncertainties, any of which could cause actual results to vary materially from anticipated results. Operating results stated herein are not necessarily indicative of results that may be expected in future periods. More information on risk factors, which could affect the Company's financial results, is included in the Company's Forms 10-K and 10Q, periodically filed with the Securities and Exchange Commission. -0- *T MOSSIMO, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) (Unaudited) June 30, December 31, -------- ------------ 2006 2005 -------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $21,490 $19,658 Restricted cash 843 726 Accounts receivable, net 6,042 4,372 Merchandise inventory 263 101 Deferred income taxes 3,702 4,004 Prepaid expenses and other current assets 426 388 -------- -------- Total current assets 32,766 29,249 PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation and amortization 808 893 DEFERRED INCOME TAXES 1,581 1,923 TRADENAME 84 90 OTHER ASSETS 60 79 -------- -------- $35,299 $32,234 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $887 $884 Accrued liabilities 1,102 503 Accrued commissions 1,542 388 Accrued bonuses 2,144 3,458 -------- -------- Total current liabilities 5,675 5,233 DEFERRED RENT 117 128 -------- -------- Total liabilities 5,792 5,361 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, par value $.001; authorized shares 3,000,000; no shares issued or outstanding - - Common stock, par value $.001; authorized shares 30,000,000; issued and outstanding 16,002,775 at June 30, 2006 and 15,828,754 at December 31, 2005 15 15 Additional paid-in capital 41,316 40,222 Accumulated deficit (11,824) (13,364) -------- -------- Net stockholders' equity 29,507 26,873 -------- -------- $35,299 $32,234 ======== ======== MOSSIMO, INC. CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (Unaudited) For the Three For the Six Months Months June 30, June 30, --------------- ----------------- 2006 2005 2006 2005 ------- ------- -------- -------- Revenue from license royalties and design service fees $9,020 $8,113 $11,581 $15,467 Product sales 1,278 932 3,655 2,242 ------- ------- -------- -------- Total revenues 10,298 9,045 15,236 17,709 Operating expenses: Cost of product sales 545 695 1,842 1,734 Selling, general and administrative 5,438 5,353 11,215 9,928 ------- ------- -------- -------- Total operating expenses 5,983 6,048 13,057 11,662 ------- ------- -------- -------- Operating earnings 4,315 2,997 2,179 6,047 Interest income 222 79 416 110 ------- ------- -------- -------- Earnings before income taxes 4,537 3,076 2,595 6,157 Income taxes 1,823 848 1,055 2,108 ------- ------- -------- -------- Net earnings $2,714 $2,228 $1,540 $4,049 ======= ======= ======== ======== Net earnings per common share: Basic $0.17 $0.14 $0.10 $0.26 ======= ======= ======== ======== Diluted $0.17 $0.14 $0.10 $0.26 ======= ======= ======== ======== Weighted average common shares outstanding: Basic 15,996 15,738 15,943 15,738 ======= ======= ======== ======== Diluted 16,061 15,768 15,997 15,762 ======= ======= ======== ======== *T