Haggar (NASDAQ:HGGR)
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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/