CHS reports stellar results, net income rises 40%!
Thursday April 29, 8:59 am Eastern Time
Company Press Release
Bernard Chaus Reports Strong Third Quarter Earnings
-- Net Income for the Quarter Up 40% and More Than Double for the Nine-Month Period--
Bernard Chaus, Inc. (NYSE: CHS - news) today announced its financial results for the third quarter and first nine months of fiscal 1999.
Third Quarter Results
For the third quarter of fiscal 1999, the period ended March 31, 1999, net income rose 40.2% to $4.3 million, or $0.16 per diluted share on a weighted average of 27.1 million common shares outstanding, compared to net income of $3.1 million, or $0.14 per diluted share on a weighted average of 21.4 million common shares outstanding, in the third quarter last year. The increase in the number of shares outstanding reflects a rights offering completed in January of 1998, following a one-for-ten reverse stock split.
Net sales for the third quarter of fiscal 1999 reached $52.1 million, a 4.6% increase from net sales of $49.8 million in the fiscal 1998 third quarter. The increase in net sales was achieved despite the absence of sales in the current quarter from the licensed Nautica brand, which was terminated in October 1998.
Josephine Chaus, Chairwoman and Chief Executive Officer, commented, ''We are very pleased with our solid performance in the quarter. These results reflect the success of our core Chaus brand, which has continued to generate a strong response from department store customers and consumers alike, following its repositioning from a moderate to a better sportswear line.
''To build on the momentum we have achieved with our revitalized Chaus brand, in February 1999, we launched two new businesses -- Josephine Chaus Studio and Josephine Chaus Essentials -- marking a substantial step in our efforts to better fulfill the lifestyle dressing needs of consumers and expand the reach and visibility of the Chaus brand. We are very excited about the potential of these new lines, which have already experienced an enthusiastic early reception from our department store customers.''
Nine Months Results
For the first nine months of fiscal 1999, net income more than doubled to $8.3 million, or $0.31 per diluted share on a weighted average of 27.1 million shares outstanding, compared to net income of $3.8 million, or $0.33 per diluted share on a weighted average of 11.4 million common shares outstanding.
Net sales for the nine-month period were $146.5 million compared to $155.8 million in the nine-month period of fiscal 1998, reflecting the closure of all but one of the Company's outlet stores in the second quarter of fiscal 1998 and the decrease in sales from its Nautica licensed business.
Bernard Chaus, Inc., designs, sources and markets an extensive range of women's career and casual sportswear, principally under the Josephine Chaus Collection, Josephine Chaus Studio, Josephine Chaus Essentials and Josephine Chaus Sport trademarks. The Company's products are sold nationwide through department store chains, specialty retailers and other outlets.
This press release contains forward-looking statements which are based upon current expectations and involve a number of uncertainties, including retail market conditions, acceptance of the Company's new product line, and the continuation of the current favorable trend in sales. Further information on potential factors which could affect the Company's financial results are included in the Company's Form 10-K/A for the year ended June 30, 1998 and Form 10-Q for the periods ended December 31, 1998, September 30, 1998 and March 31, 1998.
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except number of shares and per share amounts)
For the For the
Quarter Ended Nine Months Ended
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
(Unaudited) (Unaudited)
Net sales $52,129 $49,827 $146,471 $155,778
Cost of goods sold 37,694 36,105 108,541 116,346
------ ------- ------- -------
Gross profit 14,435 13,722 37,930 39,432
Selling, general and
administrative expenses 9,431 9,480 27,536 29,711
Income from operations 5,004 4,242 10,394 9,721
Interest expense,net 603 1,092 1,880 5,786
----- ------ ------ -----
Income before provision
for income taxes 4,401 3,150 8,514 3,935
Provision for income taxes 89 75 173 170
---- -- ----- ----
Net income $4,312 $3,075 $8,341 $3,765
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Basic earnings per share $0.16 $0.15 $0.31 $0.33
===== ====== ===== =====
Diluted earnings per share $0.16 $ 0.14 $0.31 $0.33
===== ====== ===== =====
Weighted average number
of common shares
outstanding - basic 27,116,000 21,074,000 27,116,000 11,371,000
Weighted average number
of common and common
equivalent shares
outstanding - diluted 27,116,000 21,389,000 27,145,000 11,371,000
========== ========== ========== ==========
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEET DATA
(Dollars in thousands)
March 31, March 31,
1999 1998
(Unaudited) (Unaudited)
Cash and cash equivalents $ 74 $ 162
Accounts receivable, net 41,661 36,972
Inventories 13,836 16,757
Prepaid expenses 558 483
--- ---
Total current assets 56,129 54,374
Fixed assets and other assets, net 1,106 1,694
-------- -------
Total assets $57,235 $56,068
======== =======
Notes payable - banks $ 8,131 $12,655
Accounts payable and accrued
expenses 19,998 22,194
Term loan - current 1,000 1,000
------- ------
Total current liabilities 29,129 35,849
Term loan 12,750 13,750
-------- -------
Total liabilities 41,879 49,599
Total stockholders' equity 15,356 6,469
-------- -------
Total liabilities and stockholders'
equity $57,235 $56,068
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