ALL: Press release
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Monday October 21 4:10 PM EDT
Innovo Group announces third quarter results
Nine month sales increase 43%
SPRINGFIELD, Tenn.--(BUSINESS WIRE)--Oct. 21, 1996-- Innovo Group Inc , the
manufacturer and marketer of a broad line of fashion, utility and sports bags, today
announced results for the third quarter of fiscal 1996, and for the nine months ended
Aug. 31, 1996.
Sales for the third quarter were $2.3 million, which represented a 41% increase over
sales of $1.6 million for the third quarter of fiscal 1995. Sales for the nine months of
fiscal 1996 were $5.7 million, representing a 43% increase over sales of $4.0 million
for the first three quarters of fiscal 1995.
Results for the three and nine month periods were:
Three months ended Aug. 31, 1996 July 31, 1995
(in thousands, except for per share amounts)
Sales $ 2,304 $ 1,638
Income from operations (566) (513)
Income from continuing operations (890) (601)
Net income (890) (821)
Net income per share (.05) (.30)
Nine months ended Aug. 31, 1996 July 31, 1995
Sales $ 5,704 $ 4,002
Income from operations (1,045) (596)
Income from continuing operations (1,487) (885)(a)
Net income (1,487) (1,549)(a)
Net income per share (.13) (.61)(a)
(a) excludes effects of one-time gain of $1.9 million from
settlement of litigation.
Comparative balance sheet information:
Aug. 31, 1996 Oct. 31, 1995
Total assets $11,187 $ 5,667
Total debt 8,409 5,623
Stockholders' equity 2,778 (230)
Debt to equity 3.03 to 1 n/a
Current ratio 1.19 to 1 .78 to 1
Patricia Anderson-Lasko, Innovo Group's president and CEO, explained that one of the
principal problems the company faced during the first nine months of fiscal 1996 was
now well on its way to being solved. "We recently obtained additional sewing facilities
that will come on-line in November, doubling our existing Tennessee capacity. This will
enable us to pursue the opportunities that Innovo has not been able to capitalize on this
year." In total, the company estimated that during the first nine months of fiscal 1996 it
was forced to turn away orders for $750,000 due to shortages in production capacity or
raw materials. Innovo Group's president also noted that, as a result of the capital the
company had raised in the second and third quarters, raw material stocks were now at
more appropriate levels.
Anderson-Lasko added that "this added capacity also means that our sales and
marketing staff may now begin to update Thimble Square's line of ladies at-home,
sleep and lounge wear to present to Innovo's customer base." Innovo Group's president
explained that the company had been forced to put this process on hold because of the
labor shortages. "Updating the Thimble Square line, and presenting it to Innovo's mass
merchant customers, are the keys to increasing Thimble Square's sales so that it can
contribute a profit to Innovo Group, as opposed to the losses it is currently reporting.
This plan for cross-selling Innovo and Thimble Square's two different customer bases is
a part of the strategy we developed when we initially acquired Thimble Square."
The company also pointed out that the results for the first three quarters of fiscal 1996
included expenses for the development of products that will add to the company's sales,
beginning in fiscal 1997, under several "exciting" new licenses, such as the Warner
Bros., Anheuser-Busch and Gary Patterson licenses Innovo Group has obtained this
year.
Scott Parliament, Innovo Group's new chief operating officer, observed that "we believe
that the elements necessary to turn profitable are now in place. New licenses and
products in the pipeline should allow us to continue sales growth. We are obtaining the
production capacity to meet increasing demand, and we have a revised management
structure that will increase the effectiveness of both our sales and marketing programs
and our production operations. Our focus now is on production and cost control,
including keeping overhead and interest expenses to absolute minimums, to make sure
that each new sale adds profits." Parliament declined to indicate exactly when he
believed the company would begin to report quarterly profits, but indicated that the
company believed that a profitable year in fiscal 1997 was "certainly an achievable
goal."
Innovo Group manufactures and markets a wide range of both fashion-oriented and
utility and sports-designed tote, laundry and duffle bags, lunch bags, fanny packs,
aprons and other nylon and canvas products, as well as sports-licensed bags and
backpacks and licensed t-shirts. The company's fashion lines are based on its own
designs, while the sports lines feature both company designs and the logos of NFL,
MLB, NHL, NBA and college teams. Innovo is also a licensee of and supplier to the
U.S. Olympic Teams and holds licenses from Anheuser-Busch Cos., Warner Bros. and
sports artist Gary Patterson. Innovo's Thimble Square subsidiary manufactures and
distributes a ladies' ready-to-wear at-home, sleep and lounge wear from plants in
Georgia.
CONTACT: Innovo Group, Inc., Springfield
Kirk Miller, 615/384-0100, ext. 464 |
