|
·
|
Reduced selling, general and administrative expenses by 15.6% from $39.7 million in 2009 to $33.5 million in 2010, primarily as the result of the Company’s 2009 restructuring and cost reduction plans;
|
|
·
|
Finished 2010 with a strong balance sheet that reflects $51.9 million in working capital, including $36.4 million in cash and no borrowings outstanding under the Company’s credit facility;
|
|
·
|
Elected apparel industry veterans to the Board of Directors;
|
|
·
|
Settled all remaining litigation associated with our 2006 Audit Committee Investigation, which will eliminate the related costs going forward;
|
|
·
|
Entered into a new $50.0 million credit facility with Wells Fargo Capital Finance, LLC that provides more operational flexibility at a lower cost; and
|
|
·
|
Strengthened the men’s business with appointment of menswear industry veteran Eric Prengel as President of the division and the acquisition of scott james™.
|
|
·
|
Non-Operational Expenses - The Company resolved significant non-operational matters that generated considerable costs during 2010 and 2009. To this end, the Company incurred no restructuring charges in 2010 versus $4.8 million in 2009. There were no tender offer related costs incurred in 2010 as compared to $2.1 million in 2009. The Company does not expect to incur special costs in 2011 as it resolved the remaining matters associated with the 2006 Audit Committee Investigation in 2010. During 2010 and 2009, the Company incurred $4.5 million in special costs each year.
|
|
·
|
New Credit Facility - On October 28, 2010, the Company entered into a new $50.0 million asset based revolving credit facility with Wells Fargo Capital Finance, LLC, with a $30.0 million sub-limit for letters of credit. This facility has a term of four years and expires on October 28, 2014 and is secured by substantially all assets of the Company and each of its domestic subsidiaries. This facility is designed to provide working capital and trade letters of credit that will be used primarily for the purchase and importation of inventory and for general corporate purposes.
|
|
(In thousands, except per share data)
|
2010
|
2009
|
|||
|
Net sales
|
$ 134,482
|
$ 165,178
|
|||
|
Cost of goods sold
|
108,045
|
125,777
|
|||
|
Gross profit
|
26,437
|
39,401
|
|||
|
Selling, general, and administrative expenses
|
33,484
|
39,715
|
|||
|
Restructuring charges
|
—
|
4,820
|
|||
|
Special costs
|
4,481
|
4,547
|
|||
|
Tender offer related costs
|
—
|
2,053
|
|||
|
Loss from operations
|
(11,528
|
)
|
(11,734
|
)
|
|
|
Other income (expense):
|
|||||
|
Interest income
|
68
|
176
|
|||
|
Interest expense
|
(479
|
)
|
(323
|
)
|
|
|
Other, net
|
(96
|
)
|
(376
|
)
|
|
|
Loss from continuing operations before income taxes
|
(12,035
|
)
|
(12,257
|
)
|
|
|
Income tax benefit
|
(2,359
|
)
|
(6,251
|
)
|
|
|
Loss from continuing operations
|
(9,676
|
)
|
(6,006
|
)
|
|
|
Loss from discontinued operations
|
(17
|
)
|
(40
|
)
|
|
|
Net loss
|
$ (9,693
|
)
|
$ (6,046
|
)
|
|
|
Basic loss per share:
|
|||||
|
Loss from continuing operations
|
$ (1.74
|
)
|
$ (1.10
|
)
|
|
|
Loss from discontinued operations
|
(0.00
|
)
|
(0.01
|
)
|
|
|
Net loss
|
$ (1.74
|
)
|
$ (1.11
|
)
|
|
|
Diluted loss per share:
|
|||||
|
Loss from continuing operations
|
$ (1.74
|
)
|
$ (1.10
|
)
|
|
|
Loss from discontinued operations
|
(0.00
|
)
|
(0.01
|
)
|
|
|
Net loss
|
$ (1.74
|
)
|
$ (1.11
|
)
|
|
|
Basic and diluted weighted average number of common shares outstanding
|
5,554
|
5,482
|
|||
|
SELECTED BALANCE SHEET DATA:
(excluding discontinued operations)
|
|
|||
|
Cash and cash equivalents
|
$ 33,720
|
$ 33,365
|
||
|
Restricted cash
|
$ 2,725
|
$ —
|
||
|
Accounts receivable, net
|
$ 16,410
|
$ 21,708
|
||
|
Borrowings under credit facility
|
$ —
|
$ —
|
||
|
Working capital
|
$ 51,920
|
$ 59,627
|
|
NON GAAP RECONCILIATION:
|
|||||
|
Net loss
|
$ (9,693
|
) |
$ (6,046
|
) | |
|
Income tax benefit
|
(2,359
|
) |
(6,251
|
) | |
|
Interest expense (income), net
|
411
|
147
|
|||
|
Depreciation and amortization
|
2,726
|
2,549
|
|||
|
EBITDA
|
(8,915
|
) |
(9,601
|
) | |
|
Cost of sales – supplier dispute release (1)
|
—
|
(5,081
|
) | ||
|
Restructuring charges
|
—
|
4,820
|
|||
|
Special costs
|
4,481
|
4,547
|
|||
|
Tender offer related costs
|
—
|
2,053
|
|||
|
Other, net
|
96
|
376
|
|||
|
Loss from discontinued operations
|
17
|
40
|
|||
|
Adjusted EBITDA
|
$ (4,321
|
) |
$ (2,846
|
) | |
|
(1) In the fourth quarter of 2009, the Company determined that a $5.1 million liability related to a supplier dispute was no longer required for, among other things, the lapse of regulatory and contractual statutes of limitations regarding potential claims by interested parties, and reversed the reserve against cost of sales.
The Company believes that supplementing its financial statements prepared according to generally accepted accounting principles in the United States (“GAAP) with certain non-GAAP financial measures, as defined by the Securities and Exchange Commission (“SEC”), provides a more comprehensive understanding of Company’s results of operations. Such measures include EBITDA and Adjusted EBITDA and should not be considered an alternative to comparable GAAP financial measures, but should rather be read in conjunction with the GAAP financial measures. Readers are urged to review and consider carefully the various disclosures made by the Company in its Form 10-K and other SEC filings, which advise interested parties of certain factors that affect the Company’s business.
|
|||||