Earnings release:
Cutter & Buck Reports Record Sales of $17.3 Million; Earnings Increase
34% To $1.2 Million
SEATTLE, Dec. 3 /PRNewswire/ -- Cutter & Buck, Inc. (Nasdaq: CBUK - news) today reported record sales and earnings
for the second quarter of fiscal 1998. Net sales increased 41% to $17.3 million in the second quarter ended October 31, 1997
compared to $12.3 million in the second quarter a year ago. Net income increased 34% to $1.2 million or $.21 per share on an
additional 1.6 million shares outstanding, compared to $865,000 or $.22 per share in the like quarter a year ago. For the first
half of fiscal 1998, Cutter & Buck earned $1.6 million or $.30 per share on sales of $29.7 million compared to $1.0 million or
$.26 per share on sales of $20.3 million in the first half of fiscal 1997.
''Our second quarter results are a testimony to our belief that excellent products, aggressive grassroots marketing and superior
execution remain the fundamental drivers of our business,'' stated Harvey N. Jones, Chief Executive Officer. ''Our share of the
golf pro shop market is expanding even as the number of new courses continues to move upward. We have substantially
increased our account base during the Fall season, and expect to continue to build on that base for Spring 1998.''
Second quarter gross profit improved to 41.2% of sales from 39.0% in the second quarter a year ago. Gross profit for the first
half of fiscal 1998 also improved to 40.7% from 38.3% in the first half of fiscal 1997. Operating expenses as a percentage of
net sales increased to 30.9% of sales in the second quarter of fiscal 1998 versus 28.5% in the previous year's second quarter
and increased to 32.3% in the first six months compared to 30.9% in the first half a year ago. Net income was 6.7% of sales in
the second quarter and 5.5% in the first half of the fiscal year compared to 7.0% and 5.0% in the respective periods a year
ago.
''Gross margin as a percentage of sales topped 40% for the fourth consecutive quarter,'' said Martin J. Marks, President and
Chief Operating Officer. ''Gross margin improvement was the result of strategic initiatives undertaken by the Company, and we
achieved this goal through economies of scale, improved sourcing and operational efficiencies. We are also pleased with the
recent investments we have made to strengthen our sales management group along with our financial and international
management team, as well as other operational improvements. We believe those investments will enhance the Company's ability
to capitalize on the market opportunities created by the success of the Cutter & Buck brand.''
Cutter & Buck designs, sources and markets updated traditional men's sportswear and outerwear. It distributes its products
predominately through golf pro shops and resorts, better men's specialty stores and corporate sales accounts. The company
has developed a colorful, innovative collection of high-quality sportswear targeted to the upscale men's apparel market,
projecting an updated American design evocative of a sporting lifestyle.
NOTE: 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 to penetrate its chosen distribution
channels, competition, foreign currency risks and the effect of interest rates, 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.
FINANCIAL HIGHLIGHTS
(in thousands, except per share)
Three months ended Six months ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1996 1997 1996 1997
(unaudited)(unaudited)(unaudited)(unaudited)
Net sales $12,290 $17,350 $20,290 $29,728
Cost of sales 7,494 10,205 12,514 17,623
Gross profit 4,796 7,145 7,776 12,105
Total operating expenses 3,499 5,359 6,261 9,601
Operating income 1,297 1,786 1,515 2,504
Other income (expense) (58) (26) (73) (24)
Income before income taxes 1,239 1,760 1,442 2,480
Income taxes (374) (600) (435) (845)
Net income $865 $1,160 $1,007 $1,635
Net income per share $0.22 $0.21 $0.26 $0.30
Shares used in computation of
net income per share 3,940,313 5,528,719 3,940,763 5,516,390
October 31, 1996 April 30, 1997October 31, 1997
(unaudited) (unaudited)
Current assets:
Cash $680 $7,442 $6,339
Accounts receivable 10,194 14,419 12,948
Inventories 7,475 12,489 13,357
Other current assets 1,426 1,711 2,011
Total current assets 19,775 36,061 34,655
Long term assets 2,727 2,899 3,263
Total assets $22,502 $38,960 $37,918
Current liabilities:
Accounts payable $3,310 $4,481 $1,687
Accrued liabilities 797 741 1,568
Other current liabilities 2,794 1,028 149
Total current liabilities 6,901 6,250 3,404
Long Term liabilities 561 523 486
Total shareholders' equity 15,040 32,187 34,028
Total liabilities and
shareholders' equity $22,502 $38,960 $37,918
SOURCE: Cutter & Buck, Inc. |
