Mossimo reports 1997 first-quarter results
IRVINE, Calif.--(BUSINESS WIRE)--May 8, 1997--Mossimo Inc. (NYSE:MGX) Thursday reported financial results for
the 1997 first quarter that were consistent with its preliminary announcement on April 18, 1997.
For the first quarter ended March 31, 1997, net sales were $24.6 million, compared with $24.4 million in the prior-year
period. The company reported a net loss of $498,000, or 3 cents per share, compared with pro forma net income of $4.0
million, or 28 cents per share, a year ago. Gross profit for the quarter declined to $7.7 million from $10.5 million in the 1996
first quarter.
Sales of the company's finer men's sportswear totaled $9.2 million, compared with $10.4 million a year ago, and men's
activewear sales were $7.3 million, vs. $13.0 million in the prior-year period. Women's sportswear sales, a new product
category that was launched in fall 1996, generated $7.0 million, and royalty income from licensed products totaled $1.4
million, compared with $1.3 million a year earlier.
As announced previously, the quarter's net loss was attributable primarily to nonrecurring pretax charges of approximately
$950,000 related to the discontinuance of Mossimo's TIME division and severance costs from a 7 percent work-force
reduction, combined with lower sales of its activewear products, which typically carry higher margins.
To address the softness in men's activewear sales, the company said it has appointed a segment of its design team to develop
a new line of value-priced activewear products targeted to the younger consumer and to be sold exclusively to specialty stores
and chains. The new Moss line is expected to be launched in spring 1998.
``In conjunction with our efforts to support our retailers and enhance revenues, we also are vigorously attacking the cost side
of our business, capturing opportunities to streamline and consolidate operations wherever possible,'' said Mossimo
Giannulli, chairman and chief executive officer.
``Cost-reduction initiatives currently identified are expected to result in annualized savings of at least $3.3 million. We also
have voided the employment contract of a new chief information officer due to his inability to begin employment with us in a
reasonable time frame.''
Founded in 1987, Mossimo is a leading designer of men's and women's activewear and sportswear, with a focus on the
contemporary, fashion- minded consumer. Mossimo designs are distributed to department and specialty stores nationwide.
NOTE: The matters discussed in this news release with respect to the acceptance of its proposed new Moss activewear line
and the benefits of cost reductions are forward-looking statements that involve risks and uncertainties, including changes in
consumer demands and preferences, competition from other lines and uncertainties generally associated with new product
introductions and apparel retailing. The historical results achieved are not necessarily indicative of future prospects of the
company. More information on factors that could affect the company's financial results is included in the company's
prospectus dated Feb. 22, 1996, filed with the Securities and Exchange Commission.
MOSSIMO INC.
Statements of Operations
(in thousands, except per-share data)
(unaudited)
Three months ended
March 31,
1997 1996
Net sales $ 24,588 $ 24,401
Cost of sales 16,931 13,873
Gross profit 7,657 10,528
Royalty income 1,425 1,282
9,082 11,810
Operating expenses:
General and administrative 3,454 1,679
Selling 3,125 2,228
Marketing 2,227 662
Design 1,146 453
Total operating expenses 9,952 5,022
Operating income (870) 6,788
Other (expense) income:
Other --- 2
Interest 40 (62)
Total other (expense) income 40 (60)
Income (loss) before income taxes (830) 6,728
Provision for (credit in lieu of)
income taxes (332) 910
Net income (loss) $ (498) $ 5,818
Net income (loss) per common
and common equivalent shares $ (.03)
Weighted average common shares
outstanding 15,000
Pro forma data (a):
Historical income before provision
for income taxes $ 6,728
Pro forma provision for income taxes 2,758
Pro forma net income $ 3,970
Pro forma net income per common
and common equivalent share $ .28
Pro forma weighted average common
shares outstanding 13,982
March 31,
1997 1996
Balance sheet data:
Working capital $ 33,430 $ 33,328
Total assets $ 53,809 $ 41,233
Long-term debt $ 61 $ 64
Stockholders' equity $ 40,633 $ 34,864
(a) Amounts reflect pro forma adjustments for federal and state
income taxes as if the company had been taxed as a C corporation for
the period presented. |
