Cutter & Buck Announces 64% First Quarter Sales Increase to $29.2 Million
Profits Increase 31% to $0.12 Per Share
SEATTLE--(BUSINESS WIRE)--Sept. 9, 1999--Cutter & Buck (Nasdaq:CBUK - news) today reported record first quarter sales of $29.2 million, a 64% increase over the like quarter last year. Cutter & Buck's net income for the first quarter of fiscal year 2000 increased to $1.0 million, or $.12 per diluted share, compared to $0.8 million, or $.09 per diluted share, on net sales of $17.8 million a year ago. All per share information reflects the 3-for-2 stock split.
''Fiscal 2000 is off to a fast start. Our recent follow-on stock offering allowed us to repay a significant portion of our current line of credit and will provide funds for continued growth in our existing business. Anticipated capital expenditures will include opening new retail stores and our new distribution center as well as systems improvements,'' said Harvey N. Jones, chief executive officer. ''Recently we announced plans to open a second retail location later this month at the Cherry Creek Shopping Center in Denver, Colorado. Our third retail location will be coming on board this November. Surrounded by other high-end retailers, this 4,000 square feet store will be located in the new wing of The Florida Mall, a super regional mall in Orlando, Florida.''
''Just last month we participated in the MAGIC show in Las Vegas and were very pleased with the reception of our Spring 2000 lines. Even though MAGIC is the leading men's apparel tradeshow, our women's line garnered a great deal of interest,'' added Jones. ''Cutter & Buck recently participated in the PGA Championship in Medinah, Illinois, where we were able to feature our product lines as a lead merchandise vendor. We believe that our partnership with top golf tournaments provides Cutter & Buck increased visibility with our target consumers.''
''During the first quarter of FY 2000, the company registered strong sales growth across all channels, with new accounts and a general increase in average order size,'' Jones continued. ''This reflects our ongoing introduction of new products, such as our growing women's and golf shoe lines, enhancement of our men's sportswear fashions and our continued investment in concept shops and in-store fixturing.''
''I am pleased to report that we have continued our year-over-year gross margin improvement, exceeding the 40% level for eleven straight quarters,'' added Martin J. Marks, president and chief operating officer. ''During this quarter, Cutter and Buck's gross profit margin increased to 43.8%, up from 42.9% a year ago, as benefits of economies of scale continued to improve company performance.''
''Work on our new warehouse facility, in Renton, Washington (a suburb of Seattle), continues on schedule and is tracking to plan. This 170,000 square foot facility is intended to house our distribution and embroidery operations and incorporate state of the art warehouse management and production systems,'' continued Marks.
''Overall, we are pleased with the 42% increase in our fall 1999 bookings which reflects continued growth in our corporate channel and a strong product reorder business in our golf and specialty channels,'' added Marks.
''Operating expenses increased to $10.9 million, from $6.5 million in the like quarter a year ago, reflecting additional investments in management, technology systems, and related infrastructure development to support the company's growth objectives. We are pleased that operating income grew 64% over last year's levels, however net income increased at a more moderate rate of 31% due to higher interest expense. With the pay-down on our bank working capital lines, we expect that our net margins throughout the balance of our fiscal year will not be adversely impacted by increased interest expense,'' concluded Marks.
''As we move toward the new millennium, we are positioning Cutter & Buck for planned long-term growth as a premier sportswear brand. Management is diligently working to further expand our sales and distribution channels, to enhance our brand messaging and continuing to strengthen our infrastructure,'' concluded Jones.
Statements made in this news release that are not historical facts are forward looking information. Actual results may differ materially from those projected in any forward looking information. Specifically, there are a number of important factors that could cause actual results to differ materially from those anticipated by any forward looking information. Those factors include, but are not limited to, style changes and product acceptance, relations with suppliers and independent sales representatives, the ability of the Company to control costs and expenses, the ability of the Company to carry out successful design and planned product and brand messaging/extension activities and to penetrate its chosen distribution channels, competition, foreign currency risks, risks associated with opening and operating retail locations, technological change, the successful implementation of the Company's Year 2000 compliance initiative, political and trade relations and general economic conditions. Additional information on these and other factors which could affect the Company's financial results are included in its Securities and Exchange Commission filings. Finally, there may be other factors not mentioned above or included in the Company's SEC filings that may cause actual results to differ materially from any forward-looking information.
Cutter & Buck designs and markets upscale sportswear and outerwear under the Cutter & Buck brand. The company sells its products primarily through golf pro shops and resorts, corporate sales accounts and better specialty stores. Cutter & Buck products feature distinctive, comfortable designs, high quality materials and manufacturing and rich detailing.
SUMMARY OF FALL 1999 BOOKINGS
Percentage
1999 1998 Change Difference
-------------- -------------- ---------- -------------
(as of 9/2/99)(as of 9/2/98)
GOLF $ 28,896,000 $ 22,938,000 26.0% $ 5,958,000
SPECIALTY
RETAIL $ 6,698,000 $ 6,307,000 6.2% $ 391,000
CORPORATE $ 17,224,000 $ 10,045,000 71.5% $ 7,179,000
INTERNATIONAL $ 1,008,000 $ 776,000 29.9% $ 232,000
OTHER $ 2,652,000 $ 25,000 10508.0% $ 2,627,000
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TOTAL DOMESTIC
BOOKINGS $ 56,478,000 $ 40,091,000 40.9% $ 16,387,000
CUTTER & BUCK
EUROPE $ 3,034,000 $ 1,851,000 63.9% $ 1,183,000
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TOTAL FALL
1999
BOOKINGS $ 59,512,000 $ 41,942,000 41.9% $ 17,570,000
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SUMMARY OF SALES INVOICED - FIRST QUARTER (in millions)
Percentage
FY 2000 FY 1999 Change Difference
----------- ----------- ----------- -------------
GOLF $11,537 $ 8,029 43.7% $ 3,508
SPECIALTY STORE $ 2,945 $ 1,580 86.4% $ 1,365
CORPORATE ACCOUNTS $10,216 $ 5,824 75.4% $ 4,392
OTHER $ 2,902 $ 1091 166.0% $ 1,811
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TOTAL DOMESTIC SALES $27,600 $16,524 67.0% $11,076
CUTTER & BUCK EUROPE $ 1,589 $ 1,239 28.2% $ 350
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TOTAL SALES $29,189 $17,763 64.3% $11,426
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FINANCIAL HIGHLIGHTS
(unaudited) ($ in thousands, except per share data)
(per share data reflects the June, 1999 - 3 for 2 stock split)
Consolidated Statements of Income
Three months ended July 31,
1999 1998
------------ ------------
Net Sales $ 29,189 $ 17,763
Total Cost of Goods Sold 16,417 10,151
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Gross Profit 12,772 7,612
Total Operating Expenses 10,868 6,452
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Income From Operations 1,904 1,160
Total Other Income (Expenses) (279) 81
------------ ------------
Net Income Before Provision
For Income Taxes 1,625 1,241
Provision For Income Taxes 585 447
----------- -------------
Net Income After Taxes $ 1,040 $ 794
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Basic net income per share $ 0.12 $ 0.10
============ ============
Diluted net income per share $ 0.12 $ 0.09
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Shares used in computation of:
Basic net income per share 8,375 8,003
Diluted net income per share 8,655 8,482
Consolidated Balance Sheets
July 31, April 30, July 31,
1999 1999 1998
-------- ---------- ---------
(audited)
Current Assets:
Cash $16,047 $ 4,760 $10,078
Accounts Receivable 26,571 32,519 15,961
Inventories 35,402 28,621 16,278
Other Current Assets 4,399 4,785 3,189
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Total Current Assets 82,419 70,685 45,506
Fixed Assets, net of
accumulated
depreciation 10,382 9,478 5,019
Other Assets 424 425 291
------- ------- -------
Total Assets 93,225 80,588 50,816
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Liabilities & Stockholders' Equity
Current Liabilities:
Accounts Payable 4,590 6,807 5,227
Accrued Liabilities 4,541 6,661 2,738
Notes Payable to Bank 2,647 12,085 992
Other Current Liabilities 229 220 217
------- ------- -------
Total Current Liabilities 12,007 25,773 9,174
Total Long Term Debt 5,875 5,907 843
Total Stockholders' Equity 75,343 48,908 40,799
------- ------- -------
Total Liabilities & Stockholders' Equity $93,225 $80,588 $50,816
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Contact:
Cutter & Buck
Harvey N. Jones, CEO
Marty Marks, President
206/622-4191 |
