EXHIBIT 99.1
NEWS RELEASE
FOR: Marisa Christina, Incorporated
CONTACT: Michael Lerner
Chairman and Chief Executive Officer
(212) 221-5770
S.E. Melvin Hecht
Vice-Chairman and Chief Financial Officer
(201) 758-9800
FOR IMMEDIATE RELEASE
MARISA CHRISTINA REPORTS THIRD QUARTER 2004 RESULTS
New York, New York, November 15, 2004 -- Marisa Christina, Incorporated
(Nasdaq: MRSA) today reported results for the quarter and nine months ended
September 30, 2004.
Net sales for the third quarter of 2004 were $8.4 million compared with
$10.3 million in the third quarter of 2003, a 19.1 % decrease. Net sales for the
nine months ended September 30, 2004 were $16.5 million compared with $18.4
million for the nine months ended September 30, 2003, a 10.4 % decrease. The
drop in volume is primarily due to lower sales to a large private label account.
Gross profit for the third quarter of 2004 was $3.3 million compared with
the third quarter of 2003, when the gross profit was $3.9 million. As a
percentage of net sales, gross profit increased from 37.9% for the third quarter
of 2003 to 39.6% for the third quarter of 2004.
Operating expenses for the third quarter of 2004 were $2.0 million
compared with $2.3 million in the third quarter of 2003, a reduction of 12%.
During the quarter ended September 30, 2004, the Company reassessed the
recovery of its deferred tax assets in accordance with the provisions of SFAS
No. 109, Accounting for Income Taxes. In making its' assessment, management
determined that expected operating results for the three-year period ending
December 31, 2004 will not be sufficient to support a conclusion that recovery
of the deferred tax assets is more likely than not. While management believes
the Company will achieve profitable operations in future years that will enable
the Company to recover a substantial portion of its deferred tax assets, the
Company presently does not have sufficient objective evidence to support
management's belief. Accordingly, the Company increased its valuation allowance
for deferred assets by approximately $6.6 million to $11.5 million at September
30, 2004. After giving effect to this valuation allowance, the third quarter of
2004 showed a net
loss of $5.8 million compared to the third quarter of 2003, where net income was
$1.1 million. For the first nine months of 2004 the loss was $6.8 million
compared to the first nine months of 2003, where net income was $91,600.
Marisa Christina, Inc. designs, manufactures, sources and markets a broad
line of high quality "better" clothing for women. The Marisa Christina label
includes sweaters characterized by classic, timeless styling and unique details.
Except for historical information contained herein, the statements in
this release are forward-looking statements that 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 results. Those risks include, among others, risks
associated with the success of future advertising and marketing programs, the
receipt and timing of future customer orders, price pressures and other
competitive factors and a softening of retailer or consumer acceptance of the
Company's products leading to a decrease in anticipated revenues and gross
profit margins. Those and other risks are described in the Company's filings
with the Securities and Exchange Commission (SEC), copies of which are available
from the SEC or may be obtained upon request from the Company.
-Financial Table Follows-
MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net sales $8,366 $10,347 $16,485 $18,406
Cost of goods sold 5,056 6,422 11,514 12,300
---------- ---------- ---------- ----------
Gross profit 3,310 3,925 4,971 6,106
Selling, general and administrative expenses 2,012 2,286 5,332 6,061
---------- ---------- ---------- ----------
Operating earnings (loss) 1,298 1,639 (361) 45
Interest income, net 6 1 22 23
Other income, net 8 15 102 91
---------- ---------- ---------- ----------
Earnings (loss) before income tax expense 1,312 1,655 (237) 159
Income tax expense 7,080 570 6,556 67
---------- ---------- ---------- ----------
Net earnings (loss) $(5,768) $1,085 $(6,793) $92
========== ========== ========== ==========
Basic and diluted net earnings (loss) per weighted
average common share $(0.79) $0.15 $(0.93) $0.01
========== ========== ========== ==========
Diluted weighted average common shares outstanding 7,295 7,295 7,295 7,295
========== ========== ========== ==========