EXHIBIT 99
AT THE COMPANY: Daniel D. Viren, Senior Vice President-Finance (614) 864-6400
Roy Youst, Director Corporate Communications (614) 864-6400
FOR IMMEDIATE RELEASE: Monday, August 15, 2005
R.G. BARRY CORPORATION REPORTS 2ND QUARTER RESULTS
Slipper Marketer's Improving Performance Reflects Benefits of New
Operating Model
PICKERINGTON, Ohio - August 15, 2005 - R.G. BARRY CORPORATION (OTC BULLETIN
BOARD: RGBC) today reported operating results for the second quarter and first
half ended July 2, 2005.
For the second quarter, the Company reported:
- Net sales were $16.2 million compared to $14.5 million in the second
quarter of 2004.
- A quarterly net loss of approximately $113,000, or $0.01 cent per
share loss, compared to a quarterly net loss of $8.9 million, or $0.91
per share loss, in the second quarter of 2004. The 2004 quarterly net
loss included restructuring and asset impairment charges of about $3.6
million related to the Company's phase out of its manufacturing
operations and implementation of a new business model. Comparable
charges in the second quarter 2005 totaled $108,000.
- Quarterly gross profit as a percent of sales improved to 42.2 percent
under the Company's revamped operating model compared to 27.8 percent
in the second quarter of 2004.
- Selling, general and administrative expenses also declined in the
quarter to approximately $6.8 million from approximately $8.9 million
in the comparable period of 2004.
For the half, the Company reported:
- Net sales were $33.2 million compared to net sales of $32.9 million
in the first half of 2004.
- The Company's first half net loss was approximately $1.0 million, or
a $0.10 cents per share loss, compared to a net loss of $23.1 million,
or $2.34 per share loss, in the first half of 2004. Included in the
2004 first half net loss were restructuring and asset impairment
charges of $11.9 million. Comparable charges in the first half of 2005
totaled approximately $350,000.
- Gross profit as a percent of sales in first half also continued to
improve at 41.2 percent, up from 29.0 percent in the first half of
2004.
- First half selling, general and administrative expenses declined to
approximately $14.2 million from approximately $20.1 million in the
first half of 2004.
Net sales for the second quarter and first half, compared to equivalent periods
in 2004, included favorable adjustments of approximately $1.1 million related to
sales promotions, incentives and returns. The net benefit of these adjustments
in gross profit for the second quarter and first half 2005 was approximately
$886,000. These adjustments resulted primarily from better than
anticipated sell-through rates during last year's holiday selling season and
better than expected benefits from our selling support initiatives during 2004.
"We obviously are pleased with the second quarter results and believe that the
overall improvement in what traditionally is our weakest quarter bodes well for
our future," said Thomas M. Von Lehman, President and Chief Executive Officer.
"Our strong performance thus far in 2005 is a direct result of the successful
implementation of our simplified and refocused business model in 2004.
"In looking forward for the full year, we continue to expect 2005 net sales to
be relatively flat against last year, and for the positive year-over-year
improvements in profit margin and SG&A expenses to continue through the second
half. Clearly, many uncertainties regarding our full-year performance still
exist, and we urge caution in developing earnings forecasts. Our operating model
is new, and our business remains highly seasonal and dependent upon a healthy
holiday sell-through at retail. We are, however, comfortable reiterating our
expectation that the Company will return to profitability in 2005," Mr. Von
Lehman said.
R.G. Barry Corporation senior management will conduct a conference call for all
interested parties at 1:00 p.m. EDT today. Management will discuss the Company's
performance, its plans for the future and will accept questions from invited
participants. The conference call is available at (888) 530-7880 or (706)
634-1795 until five minutes before starting time. To listen via the Internet, go
to www.rgbarry.com at least 15 minutes prior to the scheduled start time to
register, download, and install any necessary audio software.
Replays of the call will be available shortly after its completion. The audio
replay can be accessed through August 22, 2005, by calling (800) 642-1687 or
(706) 645-9291 and using pass code 8213464; or for 30 days by visiting the
Company's Web site at www.rgbarry.com. A written transcript of the call will be
available for 12 months at the Company's Web site under the "Investors/News
Release" section.
R.G. Barry Corporation, the Dearfoams(R) company, is one of the world's leading
developers and marketers of comfort footwear for at and around the home. The
Company's primary brands include Dearfoams(R) and EZfeet(R). To learn more about
the Dearfoams(R) company, visit our Web site at www.rgbarry.com.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: The statements in this news release, other than statements of historical
fact, are forward-looking statements, and are based upon information available
to the Company on the date of this release. Our forward-looking statements
inherently involve risks and uncertainties that could cause actual results and
outcomes to differ materially from those anticipated by our forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, the ability of the Company to continue sourcing products
from outside North America without incurring substantial unplanned costs and
without negatively impacting delivery times or product quality; our ability to
comply with the various terms and covenants of our asset-based
lending facility with CIT Commercial Services; the Company's ability to maintain
its inventory levels in accordance with its plans; the continued demand for the
Company's products by its customers and the continuing willingness of its
customers and suppliers to support the Company; the strength of the retail
market, especially during the holiday selling period; the unexpected loss of key
management or one or more of our key customers; and the impact of competition on
the Company's market share. Other risks to the Company's business are detailed
in our previous press releases, shareholder communications and Securities
Exchange Act filings including our Annual Report on Form 10-K for the fiscal
year ended January 1, 2005. Except as required by applicable law, we do not
undertake to update the forward-looking statements contained in this news
release to reflect new information that becomes available after the date hereof.
--tables to follow --
R. G. BARRY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars, except for per share data)
Thirteen weeks ended Twenty-six weeks ended
July 2, 2005 July 3, 2004 July 2, 2005 July 3, 2004
------------ ------------ ------------ ------------
(unaudited)
Net sales $16,219 $14,516 $33,209 $32,946
Cost of sales 9,381 10,483 19,543 23,400
----- ------ ------ ------
Gross profit 6,838 4,033 13,666 9,546
Selling, general and administrative
expenses 6,792 8,857 14,192 20,054
Restructuring and asset impairment
charges 108 3,619 349 11,901
--- ----- --- ------
Operating loss (62) ( 8,443) ( 875) ( 22,409)
Other income 45 45 90 90
Interest expense, net (155) ( 291) ( 240) ( 532)
----- -------- -------- --------
Loss from continuing operations before
income tax and minority interest (172) (8,689) ( 1,025) ( 22,851)
Income tax expense (9) (230) ( 57) (228)
Minority interest in income of
consolidated subsidiaries, net of tax -- (10) -- (9)
------- -------- ------- --------
Loss from continuing operations (181) (8,929) (1,082) (23,088)
Earnings from discontinued operations,
net of income taxes 68 16 68 16
------ ------ ------ ------
Net loss $ ( 113) $ (8,913) $ ( 1,014) $ (23,072)
======== ========= ========== ==========
Net loss per common share
basic & diluted $ ( 0.01) $ ( 0.91) $ ( 0.10) $ ( 2.34)
========= ========= ========= =========
Average number of common shares
outstanding
basic & diluted 9,842 9,839 9,839 9,839
===== ===== ===== =====
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
July 2, 2005 July 3, 2004 Jan. 1, 2005
------------ ------------ ------------
ASSETS
Cash $ 1,029 1,630 $ 958
Accounts receivable, net 5,234 8,417 10,141
Inventory 22,965 32,142 20,192
Prepaid expenses and other current assets 1,663 1,735 1,791
Assets held for disposal -- 290 --
-- --- --
Total current assets 30,891 44,214 33,082
Net property, plant and equipment 2,542 4,876 2,718
Other assets 3,296 3,593 3,292
----- ----- -----
Total assets 36,729 52,683 $ 39,092
====== ====== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Short-term notes payable 6,398 20,678 4,901
Current installments of long-term debt 988 1,847 1,721
Accounts payable 6,378 5,532 5,200
Other current liabilities 4,021 6,075 6,387
Long-term debt 294 1,269 479
Accrued retirement costs and other 14,750 14,576 15,426
Minority interest 388 --
Shareholders' equity, net 3,900 2,318 4,978
----- ----- -----
Total liabilities & shareholders' equity 36,729 52,683 $ 39,092
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