Exhibit 99.1
I.C. Isaacs Reports Second Quarter 2006 Financial Results;
Operating Results for 2Q06 In-Line with Expectations;
Company Reiterates Prior FY06 Guidance
NEW YORK--(BUSINESS WIRE)--Aug. 2, 2006--I.C. Isaacs & Company,
Inc. (OTCBB:ISAC), designer and marketer of the Marithe & Francois
Girbaud brand of casual denim and sportswear, today reported second
quarter 2006 results.
For the three months ended June 30, 2006, the Company reported
that net sales increased 10.5% to $24.0 million, compared to $21.7
million in the second quarter of 2005. Gross profit increased 10.5% to
$9.8 million, compared to $8.8 million in the prior year's period.
These increases in sales and gross profit are the direct result of the
Company's strategy to improve its product, distribution and branding.
The Company noted that its order backlog as of June 30, 2006 was
approximately $26.9 million, up 25% from June 30, 2005.
Diluted earnings per share for the second quarter were $0.18,
which includes $622,000 of non-cash option expenses and $332,000 of
non-cash income tax benefit. Excluding these items, which is
consistent with guidance and the year-ago period's results, the
Company would have reported $0.21 per diluted share, or a growth rate
of 40% versus the year-ago level of $0.15 per diluted share.
Peter Rizzo, Chairman and Chief Executive Officer commented, "We
are proud of our accomplishments in the second quarter, the first full
quarter which shows the benefits of our turnaround. Our sales
increased, we continued to show improvement to our gross profit and we
created additional efficiencies in our expense structure."
Mr. Rizzo concluded, "I.C. Isaacs has entered a new phase of
growth. As we go forward, we believe we will continue to see
improvement to our operational performance and financial position. Our
business has clearly strengthened, the product lines are solid, and
our management and operations are performing well. We are very happy
with the current makeup of our distribution and are looking to
selectively add new doors and accounts to build on our momentum. Our
business is on very firm footing and we have set the stage for growth
in the back half of the fiscal year."
For the 2006 fiscal year, the Company expects to realize diluted
earnings per share of $0.76 to $0.79, which is approximately 25-30%
over last year's operating results of $0.61 per diluted share. This
guidance does not include the expected impact of the adoption of FASB
123R, which is anticipated to be approximately $0.08 per diluted share
for the full fiscal year. As a reminder, fiscal 2005 diluted earnings
per share were reported at $0.48, due to a one-time charge of $0.13
per diluted share related to the settlement of arbitration proceedings
commenced against it by a former executive.
The Company will hold a conference call with senior management to
discuss the financial results at 4:30 p.m. ET today. A live webcast of
the conference call will be available at www.viavid.net. Please visit
the Web site at least 15 minutes early to register for the
teleconference webcast and download any necessary software.
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
2006, including, without limitation, statements regarding the
Company's expectations with respect to the economic environment in
2006 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, (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, (vi) the effect the restructuring of the women's
line will have on future income, and (vii) the result of improved
operating procedures will have on the order backlog. 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.
(Financial tables to follow)
I.C. Isaacs & Company, Inc.
Consolidated Statements of Operations (Unaudited)
(000's omitted except per share data)
Three Months Six Months
Ended Ended
June 30, June 30,
--------------------------------
2006 2005 2006 2005
--------------------------------
Net sales $24,041 $21,749 $45,304 $45,451
Cost of sales 14,270 12,907 26,467 26,658
--------------------------------
Gross profit 9,771 8,842 18,837 18,793
--------------------------------
Operating Expenses
Selling 2,599 2,691 5,293 5,690
License fees 1,581 1,235 2,959 2,723
Distribution and shipping 618 580 1,230 1,130
General and administrative 2,800 2,136 4,838 4,385
--------------------------------
Total operating expenses 7,598 6,642 14,320 13,928
--------------------------------
Operating income 2,173 2,200 4,517 4,865
--------------------------------
Other income (expense)
Interest, net of interest income (98) (140) (180) (250)
Other, net (2) -- 4 --
--------------------------------
Total other income (expense) (100) (140) (176) (250)
--------------------------------
Income before income taxes 2,073 2,060 4,341 4,615
Income tax benefit (expense) 272 (41) 549 (92)
--------------------------------
Net income $ 2,345 $ 2,019 $ 4,890 $ 4,523
--------------------------------
Basic income per share $ 0.20 $ 0.17 $ 0.41 $ 0.39
Basic weighted average shares
outstanding 11,996 11,713 11,996 11,682
Diluted income per share $ 0.18 $ 0.15 $ 0.39 $ 0.34
Diluted weighted average shares
outstanding 12,689 13,407 12,669 13,407
I.C. Isaacs & Company, Inc.
Consolidated Balance Sheets
(000's omitted except per share data)
June 30, Dec. 31,
2006 2005
--------------------
(Unaudited)(Audited)
Assets
Current
Cash, including temporary investments of $76 and
$561 $ 450 $ 943
Accounts receivable, less allowance for doubtful
accounts of $693 and $700 19,598 14,829
Inventories 11,053 5,287
Deferred tax asset 3,167 2,517
Prepaid expenses and other 510 404
--------------------
Total current assets 34,778 23,980
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 2,700 2,839
Other assets 312 323
--------------------
$37,790 $27,142
====================
Liabilities And Stockholders' Equity
Current
Checks issued against future deposits $ -- $ 447
Revolving line of credit 6,346 --
Current maturities of long-term debt 2,565 2,893
Accounts payable 4,027 2,064
Accrued expenses and other current liabilities 3,499 5,492
--------------------
Total current liabilities 16,437 10,896
--------------------
Long-term debt 948 1,726
Minimum pension liability 1,598 1,377
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, 13,173 shares issued; 11,996 shares
outstanding 1 1
Additional paid-in capital 45,069 44,295
Accumulated deficit (18,324) (23,214)
Accumulated other comprehensive income (5,616) (5,616)
Treasury stock, at cost (1,177 shares) (2,323) (2,323)
--------------------
Total stockholders' equity 18,807 13,143
--------------------
$37,790 $27,142
====================
CONTACT: I.C. Isaacs & Company:
Gregg Holst
646-459-2670
or
Investor Relations
Integrated Corporate Relations
Bill Zima/James Palczynski
203-682-8200