Exhibit 99.1
S & K FAMOUS BRANDS REPORTS SIX MONTH AND SECOND QUARTER RESULTS
Richmond, VA, August 24, 2004—S&K Famous Brands, Inc. (NASDAQ:SKFB;www.skmenswear.com ) today announced results for the six months and second quarter ended July 31, 2004.
For the six months ended July 31, 2004, net income was $1,648,000, or $0.62 per diluted share, compared to $1,736,000, or $0.68 per diluted share, for the same period last year. Total sales increased 7.3% to $91.4 million compared to $85.1 million for the first six months of last year. Same-store sales for the first six months were up 4.6% over last year.
Results for the second quarter were a net loss of ($124,000), or ($0.05) per diluted share, compared to net income of $207,000, or $0.08 per diluted share, in the same period last year. Total sales were $40.5 million compared to $41.1 million in the same quarter of last year. Comparable store sales for the second quarter decreased 4.3%.
Stewart M. Kasen, President and Chief Executive Officer, said, “The shifting of the mix of our sales to lower margin goods this quarter combined with a very strong 9% comparable store sales increase last year made it a challenging quarter. On the positive side, we believe our current merchandise offerings are well positioned for our customers and we look forward to the fall selling period.”
During the first six months, the Company has opened four new stores, relocated two other stores and closed three stores which were performing below the Company’s sales and profitability expectations.
S&K Famous Brands, Inc. is a retailer of value-priced menswear operating 238 stores in 27 states reaching from the East Coast to Texas and from Maine to Florida. S&K offers a complete line of men’s apparel generally priced 20-40% below department store and specialty store regular prices. For more information,go to our Web site atwww.skmenswear.com.
(Financial Tables to Follow)
Except for historical information contained herein, the statements in this release may be forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company’s actual results in future periods to differ materially from forecasted or expected results. Those risks include, among other things, the competitive environment in the value-priced men’s apparel industry in general and in the Company’s specific market area, inflation, changes in costs of goods and services and economic conditions in general and in the Company’s specific market area. Those and other risks are more fully described in the Company’s filings with the Securities and Exchange Commission.
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S & K FAMOUS BRANDS, INC.
STATEMENTS OF INCOME
(unaudited)
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| | | Three Months Ended
| | | Six Months Ended
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($ and shares in 000s, except per share data) | | July 31, 2004
| | | August 2,
2003
| | | July 31, 2004
| | | August 2,
2003
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Net sales | | $ | 40,479 | | | $ | 41,128 | | | $ | 91,389 | | | $ | 85,147 | |
Cost of sales | | | 22,567 | | | | 22,599 | | | | 50,513 | | | | 45,582 | |
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Gross profit | | | 17,912 | | | | 18,529 | | | | 40,876 | | | | 39,565 | |
Other costs and expenses: | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | 17,226 | | | | 17,338 | | | | 36,577 | | | | 35,081 | |
Interest | | | 66 | | | | 124 | | | | 109 | | | | 218 | |
Depreciation and amortization | | | 753 | | | | 761 | | | | 1,503 | | | | 1,519 | |
Other income, net | | | 67 | | | | (28 | ) | | | 29 | | | | (53 | ) |
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Income before income taxes | | | (200 | ) | | | 334 | | | | 2,658 | | | | 2,800 | |
Provision (benefit) for income taxes | | | (76 | ) | | | 127 | | | | 1,010 | | | | 1,064 | |
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Net income (loss) | | $ | (124 | ) | | $ | 207 | | | $ | 1,648 | | | $ | 1,736 | |
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Diluted net earnings (loss) per share | | $ | (.05 | ) | | $ | .08 | | | $ | .62 | | | $ | .68 | |
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Weighted average common shares outstanding plus dilutive potential common shares | | | 2,490 | | | | 2,576 | | | | 2,657 | | | | 2,540 | |
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Effective income tax rate | | | 38.0 | % | | | 38.0 | % | | | 38.0 | % | | | 38.0 | % |
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CONDENSED BALANCE SHEETS
(unaudited)
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($ in 000s) | | July 31, 2004
| | August 2,
2003
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Assets: | | | | | | |
Inventory | | $ | 55,165 | | $ | 53,186 |
Other current assets | | | 7,010 | | | 6,328 |
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Total current assets | | | 62,175 | | | 59,514 |
Property and equipment, net | | | 15,124 | | | 15,337 |
Other assets | | | 4,121 | | | 7,297 |
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| | | $ | 81,420 | | $ | 82,148 |
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Liabilities and Shareholders’ Equity: | | | | | | |
Accounts payable | | $ | 11,280 | | $ | 10,217 |
Other current liabilities | | | 6,088 | | | 7,769 |
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Total current liabilities | | | 17,368 | | | 17,986 |
Long-term debt | | | 10,810 | | | 14,395 |
Other long-term liabilities | | | 2,572 | | | 1,842 |
Deferred income taxes | | | 1,164 | | | 1,505 |
Shareholders’ equity | | | 49,506 | | | 46,420 |
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| | | $ | 81,420 | | $ | 82,148 |
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