Haggar (NASDAQ:HGGR)
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Haggar Increases FY 2003 Core Earnings Per Share 19% From FY 2002 And Net Sales
Exceed Street Expectations
DALLAS, Nov. 4 /PRNewswire-FirstCall/ --
Fourth Quarter and Annual Highlights:
-- Grew core earnings per share 19% for the year to $1.18 in fiscal 2003
from $0.99 in fiscal 2002.
-- Improved core earnings per share in fiscal fourth quarter by 60% to
$0.64 in 2003 from $0.40 in 2002.
-- Outstanding performance from two new exciting products in 2003: the
Haggar(R) comfort fit waist pant product and the Freedom Khaki(TM).
-- Successfully launched a new pants license with Kenneth Cole during
the fourth quarter of fiscal 2003.
-- Introduced a new women's comfort fit waist pant product at major
retailers.
-- Reduced debt by 63% to $9.3 million at September 30, 2003 from
$25.1 million at September 30, 2002.
Haggar Corp. (NASDAQ:HGGR) announced results for the fourth quarter and full
year for fiscal year 2003, which ended September 30, 2003.
Actual net income for the fourth quarter of fiscal 2003 was $7,327,000, or $1.12
earnings per diluted share, as compared to actual net income of $3,543,000 for
the fourth quarter of fiscal 2002, or $0.55 earnings per share. For the fourth
quarter of fiscal 2003, Haggar reported a 60% increase in core earnings per
diluted share to $0.64, or $4,192,000 in core earnings. This compares to the
fourth quarter of 2002, in which the Company reported core earnings per diluted
share of $0.40, or $2,574,000 in core earnings. Net sales for the fourth
quarter of fiscal 2003 were $125,546,000 versus $133,226,000 in the fourth
quarter of fiscal 2002.
Actual net income for the full year of 2003 was $9,856,000, or $1.53 earnings
per diluted share, as compared to a net loss for 2002 of $7,565,000 or $1.17
loss per share. For the full year of 2003, Haggar reported a 19% increase in
core earnings per diluted share to $1.18 in 2003, or $7,599,000 in core
earnings. This compares to 2002, in which the Company reported core earnings
per diluted share of $0.99, or $6,350,000 in core earnings. Net sales for the
full year of 2003 were $482,375,000 versus $481,831,000 in 2002.
Earnings Summary (unaudited)
(in thousands, except
per share amounts)
Three Months Ended Twelve Months Ended
September 30, September 30,
2003 2002 2003 2002
Actual net income (loss) $7,327 $3,543 $9,856 $(7,565)
Actual net income (loss)
per common share - Diluted $1.12 $0.55 $1.53 $(1.17)
Unusual charges (benefits)
net of tax:
Gain on sale of global
headquarters, net (3,225) --- (3,225) ---
Reduction in force 90 625 90 625
Proxy defense costs --- --- 752 ---
Gain on Sale of Edinburg, Texas
facility --- --- (203) ---
Legal settlement
on landlord dispute --- --- 329 ---
Reduction of legal reserve --- (1,947) --- (1,947)
Closure of Dominican Republic
sewing facility --- 353 --- 353
Revision of Edinburg, Texas
facility write-off --- --- --- (1,294)
Closure of cutting facility --- --- --- 600
Impact of SFAS No.142
(goodwill and other
intangible assets) --- --- --- 15,578
Core earnings $4,192 $2,574 $7,599 $6,350
Core earnings per share
- Diluted $ 0.64 $0.40 $ 1.18 $ 0.99
Weighted average shares
outstanding - Diluted 6,529 6,443 6,453 6,429
Review of Core Earnings:
J. M. Haggar, III, the Company's Chairman and Chief Executive Officer, stated,
"We are excited about our performance for 2003. Our new products at retail are
working effectively in driving value for our customers and the consumer,
particularly our new Haggar(R) comfort fit waist pant, as well as our stain
resistant wrinkle-free product, the Freedom Khaki(TM). Pricing pressures
continue to impact our gross margins, but we remain committed to our strategy of
growing market share."
Frank Bracken, President and Chief Operating Officer, noted, "New innovative
products for the Haggar(R) brand, our Horizon Group (private label) and the
Claiborne(R) brand continue to fuel the success of the Company and are the
cornerstone of our successful history in the apparel business. Additionally, the
Kenneth Cole licensed product hit stores in August with smashing success at
retail. Both Kenneth Cole and Haggar have been pleased with the product
reception at retail. The Haggar women's pant program has recently been
introduced in wide distribution at retail with JCPenney."
David Tehle, Executive Vice President and Chief Financial Officer, noted, "The
Company reduced its debt by 63% to $9.3 million as of the end of fiscal 2003, as
compared to $25.1 million in debt as of the end of fiscal 2002, due to the
Company's excellent supply chain management and improved collections."
The Haggar Board of Directors continued the $0.05 per share quarterly dividend.
The dividend will be payable on November 17, 2003, to shareholders of record as
of November 3, 2003.
The Company will file a Form 8-K with the Securities and Exchange Commission
today with its financial projections for fiscal 2004 with net sales of
$474,000,000 to $491,000,000 and an earnings per share estimate of $1.09 to
$1.28. The earnings estimate includes $0.08 - $0.10 per share of one-time costs
associated with the global headquarters relocation.
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, United
Kingdom, Canada, Mexico, and Indonesia. Haggar also holds exclusive licenses to
use the Claiborne(R) trademark in the United States to manufacture, market, and
sell men's shorts and pants and to use the Kenneth Cole New York(R) and Reaction
Kenneth Cole(R) trademark throughout the United States to manufacture,
distribute and sell men's tailored dress pants and men's classification dress
and casual pants and shorts 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.
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
(loss) 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 Year Ended
Statements of Operations September 30, September 30,
2003 2002 2003 2002
(In thousands, except per share amounts)
Net sales $ 125,546 $ 133,226 $ 482,375 $ 481,831
Cost of sales 90,984 94,560 353,091 351,704
Reorganization costs --- (2,655) --- (3,812)
Gross profit 34,562 41,321 129,284 133,939
Selling, general and
administrative expenses (29,221) (34,521) (119,300) (118,442)
Royalty income 541 421 1,593 1,326
Other income 6,085 49 6,687 613
Interest expense (563) (792) (2,535) (3,600)
Income before provision
for income taxes
and cumulative effect
of accounting change 11,404 6,478 15,729 13,836
Provision for income taxes 4,077 2,935 5,873 5,823
Income before cumulative
effect of accounting change 7,327 3,543 9,856 8,013
Cumulative effect of
accounting change --- --- --- (15,578)
Net income (loss) $ 7,327 $ 3,543 $ 9,856 $ (7,565)
Income per common share
before cumulative effect
of accounting change
- Basic $ 1.14 $ 0.55 $ 1.53 $ 1.25
- Diluted $ 1.12 $ 0.55 $ 1.53 $ 1.25
Cumulative effect
of accounting change
per common share
- Basic --- --- --- (2.44)
- Diluted --- --- --- (2.42)
Net income (loss)
per common share
- Basic $ 1.14 $ 0.55 $ 1.53 $ (1.19)
- Diluted $ 1.12 $ 0.55 $ 1.53 $ (1.17)
Weighted average
shares outstanding
- Basic 6,442 6,420 6,424 6,385
- Diluted 6,529 6,443 6,453 6,429
Condensed Consolidated
Balance Sheet Sept. 30, 2003 Sept. 30, 2002
Assets (In thousands)
Cash and cash equivalents $ 7,674 $ 4,124
Accounts receivable, net 56,528 64,284
Inventories 96,627 100,996
Property held for sale --- 2,157
Deferred tax benefit 10,505 12,087
Other current assets 3,557 2,766
Total current assets 174,891 186,414
Property, plant and equipment, net 45,932 46,195
Goodwill 9,472 9,472
Other assets 7,580 7,896
Total Assets $ 237,875 $ 249,977
Liabilities and Stockholders' Equity
Accounts payable $ 25,913 $ 30,542
Accrued liabilities 31,898 35,669
Accrued wages and other
employee compensation 7,228 6,713
Current portion of long-term debt 3,671 3,742
Total current liabilities 68,710 76,666
Other non-current liabilities 10,077 8,247
Long term debt 5,671 21,343
Stockholders' equity 153,417 143,721
Total Liabilities
and Stockholders' Equity $ 237,875 $ 249,977
DATASOURCE: Haggar Corp.
CONTACT: David Tehle, Executive Vice President and Chief Financial
Officer of Haggar Corp., +1-214-956-4511, or fax, +1-214-956-4446
Web site: http://www.haggarcorp.com/