Exhibit 99.1
I.C. Isaacs Reports Strong Fourth Quarter and Fiscal Year 2004 Results
NEW YORK--(BUSINESS WIRE)--March 4, 2005--I.C. Isaacs & Company,
Inc. (OTCBB:ISAC.OB)
Fourth Quarter Net Income Amounted to $1.5 Million, Reversing by $2.5
Million a $1.0 Million Net Loss Sustained in the Same Period of 2003
Fiscal Year Net Income of $6.2 Million in 2004 Versus Net Loss of
$1.7 Million Last Year
I.C. Isaacs & Company, Inc. (OTCBB:ISAC.OB), designer and marketer
of the Marithe & Francois Girbaud brand of casual denim and
sportswear, today reported net income of $1.5 million, or $0.11 per
diluted share, for the three months ended December 31, 2004, compared
to a net loss of $1.0 million, or ($0.09) per diluted share, for the
three months ended December 31, 2003. Net income for fiscal year 2004
were $6.2 million, or $0.46 per diluted share, compared to a net loss
of $1.7 million, or ($0.15) per diluted share, for the same period of
2003.
"This was a defining year for I.C. Isaacs," said Peter Rizzo,
Chairman and CEO of I.C. Isaacs. "After six years of consecutive
losses, amounting to $54 million in the aggregate, 2004 net sales grew
25.3% over 2003 and net income increased $7.9 million to $6.2 million,
as compared to a net loss of $1.7 million in 2003. These achievements
are a tribute to the combined talents of our New York, Baltimore and
Milford teams, all of whom contributed greatly to setting the Company
on a path for continued success."
"In the fourth quarter, despite a difficult holiday retail sales
period, we significantly improved our gross margins and made continued
improvements to our net sales. We are encouraged by the trends we are
seeing in our spring bookings and look forward to building upon our
achievements in 2005 and beyond," Mr. Rizzo added.
Fourth Quarter 2004 Results
Net income increased $2.5 million to $1.5 million, or $0.11 per
diluted share, for the three months ended December 31, 2004, compared
to a net loss of $1.0 million, or ($0.09) per diluted share, for the
three months ended December 31, 2003.
Net sales increased 13.7% to $18.3 million in the fourth quarter
of 2004 from $16.1 million in the fourth quarter of 2003.
Gross profit increased by 28.8% to $6.7 million in the fourth
quarter of 2004 from $5.2 million in the fourth quarter of 2003. Gross
margins increased to 36.6% in the fourth quarter of 2004 from 32.3% in
the fourth quarter of 2003. The Company continued to experience higher
gross profit and gross margins due to increased product mark-up and
improved negotiations with its suppliers.
Operating expenses increased 5.1% to $6.2 million in the fourth
quarter of 2004 from $5.9 million in the fourth quarter of 2003. The
increase in operating expenses resulted primarily from higher
administrative expenses associated with Company's management
restructuring which started in the latter part of 2003. Operating
expenses as a percentage of net sales were 33.9% in the fourth quarter
of 2004, compared to 36.6% in the fourth quarter of 2003.
As a result of the income the Company generated in 2004, the
Company's management reevaluated its net operating losses and the
related valuation reserves and has recognized a net income tax benefit
of $1.2 million, which represents a non-operating contribution to net
income of $0.08 per diluted share, in the fourth quarter of 2004. In
prior years, no such tax benefit was allowed in due to the uncertainty
of the Company's ability to generate future taxable income at that
time. Income before tax benefit was $0.4 million for the fourth
quarter of 2004 compared to a loss of $1.0 million in the same period
of 2003.
Fiscal Year 2004 Results
Net income increased $7.9 million to $6.2 million, or $0.46 per
diluted share, for fiscal year 2004, compared to a net loss of $1.7
million, or ($0.15) per diluted share, for fiscal year 2003.
Net sales grew 25.3% to $80.6 million for fiscal year 2004, from
$64.3 million for fiscal year 2003, due to strong growth in both the
Men's and Women's product lines
Gross profit increased 51.0% to $31.1 million in fiscal year 2004
from $20.6 million in fiscal year 2003. Gross margins increased to
38.6% in fiscal year 2004 from 32.0% in fiscal year 2003.
Operating expenses increased 20.0% to $25.2 million in fiscal year
2004 from $21.0 million in fiscal year 2003. The increase in operating
expenses resulted primarily from higher selling expenses and licensing
fees associated with higher sales as well as an increase in
administrative expenses. Operating expenses as a percentage of net
sales were 31.3% in fiscal year 2004 compared to 32.7 % in fiscal year
2003.
As previously mentioned, the Company recognized an income tax
benefit of $1.2 million, which represents a non-operating contribution
to net income of $0.08 per diluted share, in fiscal year 2004. Income
before tax benefit was $5.1 million for fiscal year 2004 compared to a
net loss of $1.7 million for fiscal year 2003.
Order Backlog
The Company's order backlog was $27.4 million at December 31,
2004, an increase of 49.7% compared to $18.3 million at December 31,
2003. The resulting increase is the continuation of the Company's
improved operating procedures to receive and input orders earlier.
About I.C. Isaacs & Company
I.C. Isaacs & Company, Inc. is a designer and marketer of branded
casual denim and sportswear based in New York and Baltimore. The
Company offers full lines of casual denim and sportswear for men and
women under the Marithe & Francois Girbaud brand in the United States
and Puerto Rico.
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Those
statements include statements regarding the intent, belief, or current
expectations of I.C. Isaacs and its management with respect to
expenses and expected financial results of the Company for the year
2005, including without limitation statements regarding the Company's
expectations with respect to the economic environment in 2005 and
belief in the strength and future of the Girbaud brand. Such
statements are subject to a variety of risks and uncertainties, many
of which are beyond the Company's control, which could cause actual
results to differ materially from those contemplated in such
forward-looking statements, including, but not limited to, (i) changes
in the marketplace for the Company's products, including customers'
taste, (ii) the introduction of new products or pricing changes by the
Company's competitors, (iii) changes in the economy, (iv) termination
of one or more of its agreements for the use of the Girbaud brand
names and images, and (v) the risk that the Company's sales estimate
will differ from actual orders and the Company will order too much or
too little inventory. Existing and prospective investors are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation
to update or revise the information contained in this press release,
whether as a result of new information, future events or circumstances
or otherwise.
I.C. Isaacs & Company, Inc.
Consolidated Statements of Operations
(000's omitted except per share data)
Three Months Ended Year Ending
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net sales $ 18,329 $ 16,050 $ 80,649 $ 64,305
Cost of sales 11,595 10,889 49,583 43,706
----------- ----------- ----------- -----------
Gross profit 6,734 5,161 31,066 20,599
----------- ----------- ----------- -----------
Operating Expenses
Selling 2,583 2,715 10,413 9,525
License fees 1,323 1,153 5,330 4,163
Distribution and
shipping 488 508 1,968 2,062
General and
administrative 1,835 1,524 7,532 5,244
----------- ----------- ----------- -----------
Total operating
expenses 6,229 5,900 25,243 20,994
----------- ----------- ----------- -----------
Operating income
(loss) 505 (739) 5,823 (395)
----------- ----------- ----------- -----------
Other income (expense)
Interest, net of
interest income (146) (298) (729) (1,009)
Loss on sale of
property -- -- -- (415)
Other, net 1 58 26 124
----------- ----------- ----------- -----------
Total other income
(expense) (145) (240) (703) (1,300)
----------- ----------- ----------- -----------
Income (loss) before
income taxes 360 (979) 5,120 (1,695)
Income tax benefit,
net 1,139 -- 1,045 --
----------- ----------- ----------- -----------
Net income (loss) $ 1,499 $ (979) $ 6,165 $ (1,695)
----------- ----------- ----------- -----------
Basic income (loss)
per share $ 0.13 $ (0.09) $ 0.55 $ (0.15)
Basic weighted average
shares outstanding 11,545 11,135 11,264 11,135
Diluted income (loss)
per share $ 0.11 $ (0.09) $ 0.46 $ (0.15)
Diluted weighted
average shares
outstanding 13,636 11,135 13,355 11,135
I.C. Isaacs & Company, Inc.
Consolidated Balance Sheets
(000's omitted except per share data)
December 31, December 31,
2004 2003
------------ ------------
Assets
Current
Cash, including temporary investments of
$70 and $168 $ 1,046 $ 783
Accounts receivable, less allowance for
doubtful accounts of $316 and $275 10,016 9,871
Inventories 8,317 3,855
Deferred tax asset 1,193 --
Prepaid expenses and other 510 68
------------ ------------
Total current assets 21,082 14,577
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 2,087 777
Other assets 4,663 4,736
------------ ------------
$ 27,832 $ 20,090
============ ============
Liabilities And Stockholders' Equity
Current
Checks issued against future deposits $ -- $ 198
Revolving line of credit 223 4,224
Current maturities of long-term debt 3,366 2,014
Accounts payable 3,098 1,040
Accrued expenses and other current
liabilities 5,799 2,523
------------ ------------
Total current liabilities 12,486 9,999
------------ ------------
Long-term debt 3,192 4,544
Commitments and Contingencies
Stockholders' Equity
Preferred stock; $.0001 par value; 5,000
shares authorized, none outstanding -- --
Common stock; $.0001 par value; 50,000
shares authorized, 12,722 and 12,311
shares issued; 11,614 and 11,135 shares
outstanding 1 1
Additional paid-in capital 44,101 43,659
Accumulated deficit (29,625) (35,790)
Treasury stock, at cost (1,177 shares) (2,323) (2,323)
------------ ------------
Total stockholders' equity 12,154 5,547
------------ ------------
$ 27,832 $ 20,090
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CONTACT: I.C. Isaacs & Company, Inc.
by
Abernathy Macgregor Group
Winnie Lerner, 212-371-5999