Haggar (NASDAQ:HGGR)
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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/