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MARISA CHRISTINA REPORTS THIRD QUARTER 1999 RESULTS
- RETURNS TO OPERATING PROFITABILITY -
- COMPLETES SALE OF ADRIENNE VITTADINI -
New York, New York, November 4, 1999 -- Marisa Christina, Incorporated
(Nasdaq:MRSA) today reported results for the third quarter ended September 30,
1999.
Net sales for the third quarter were $20.4 million compared with $23.1
million in the comparable quarter of 1998. The Company reported a net profit for
the quarter of $981,559, or $0.13 per diluted share, compared to a net loss of
$13.2 million, or $1.62 per diluted share, in the same period a year ago.
As previously announced, on September 2, 1999 the Company completed the
sale of the Adrienne Vittadini Division for $9.5 million in cash, resulting in a
pretax gain in the third quarter of $645,899, or $0.06 per diluted share after
tax. Included in the third quarter of 1998 were pretax one-time restructuring
and asset impairment charges of $20.3 million, or $1.64 per diluted share after
tax, reflecting the resignations of Adrienne and Gianluigi Vittadini and the
writedown of goodwill related to the purchase of Adrienne Vittadini Enterprises.
Excluding these non-recurring items in both periods, operating earnings
in the third quarter were $721,000, compared to an operating loss of $428,000 in
the comparable quarter last year. Net income before non-recurring items in the
third quarter was $552,000, or $0.07 per diluted share, compared to $195,000, or
$0.02 per diluted share in the third quarter of 1998.
For the first nine months of 1999, net sales were $45.4 million
compared with $56.4 million in the 1998 nine months. The net loss was $2.3
million, or $0.29 per diluted share, compared with a loss of $15.6 million, or
$1.91 per diluted share, in the same period of 1998. Included in the 1999 nine
month period was the aforementioned pretax gain of $645,899, or $0.06 per
diluted share after tax, from the sale of the Vittadini Division. Included in
the first nine months of 1998 were pretax restructuring and asset impairment
charges of $20.3 million, or $1.64 per diluted share after tax, as discussed
above.
- MORE -
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MARISA CHRISTINA REPORTS THIRD QUARTER 1999 RESULTS PAGE 2
Michael Lerner, Chairman and Chief Executive Officer, commented, "The
sale of the Vittadini Division in September capped the recovery of Marisa
Christina. The Company returned to profitability in the third quarter on an
operating basis, and was even more profitable on a pro forma basis excluding
Vittadini. In addition, the cash proceeds from the sale enabled us to
significantly pay down our bank loans, substantially improving our balance sheet
liquidity and our capitalization."
Mr. Lerner concluded, "We are encouraged by the continued solid
increases in our backlogs at Marisa Christina and recent trends in orders at
Flapdoodles. These trends, combined with our substantially strengthened balance
sheet, give us the optimism to look forward to sustained profitability for the
fourth quarter and next year."
Marisa Christina, Inc. designs, manufactures, sources and markets a
broad line of high quality "better" and "bridge" clothing for women and
children. The Marisa Christina label includes sweaters characterized by classic,
timeless styling and unique details. Flapdoodles apparel consists of casual
children's and infant's sportswear, swimwear, and outerwear featuring vibrant
colors, all-natural fabrics and unique patterns.
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-
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MARISA CHRISTINA, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
1999 1998 1999 1998
---- ---- ---- ----
Net sales $ 20,434 $ 23,064 $ 45,425 $ 56,364
Cost of goods sold 14,358 16,699 34,633 41,114
------ ------ ------ -------
Gross profit 6,076 6,365 10,792 15,250
Selling, general and administrative expenses 5,355 6,793 15,353 19,583
Restructuring charge - - 3,750 - - 3,750
Asset impairment charge - - 16,525 - - 16,525
--------- ------- ---------- -------
Operating earnings (loss) 721 (20,703) (4,561) (24,608)
Other income, net 287 787 1,138 1,663
Gain on the sale of the Adrienne
Vittadini Division 646 - - 646 - -
Interest expense, net (178) (170) (609) (490)
-------- --------- ------- ---------
Earnings (loss) before income tax
expense (benefit) 1,476 (20,086) (3,386) (23,435)
Income tax expense (benefit) 494 (6,899) (1,134) (7,860)
-------- --------- ------- ---------
Net earnings (loss) 982 (13,187) (2,252) (15,575)
Other comprehensive income,
net of tax - foreign currency
translation adjustment - - 1 5 1
--------- --------- --------- --------
Comprehensive income (loss) $ 982 $(13,186) $ (2,247) $ (15,574)
========== ========== ========== ==========
Net earnings (loss) per share:
Basic $ 0.13 $ (1.62) $ (0.29) $ (1.91)
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Diluted $ 0.13 $ (1.62) $ (0.29) $ (1.91)
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Weighted average shares outstanding 7,766 8,126 7,766 8,149
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