Exhibit 99.1
I.C. Isaacs Reports First Quarter 2007 Financial Results
NEW YORK--(BUSINESS WIRE)--May 9, 2007--I.C. Isaacs & Company,
Inc. (OTCBB:ISAC), designer and marketer of the Marithe & Francois
Girbaud brand of casual denim and sportswear, today reported first
quarter 2007 results.
For the three months ended March 31, 2007, the Company reported
that net sales were $14.2 million compared to $21.3 million for the
three months ended March 31, 2006. The Company reported a first
quarter net loss of $2.1 million, or $0.17 per diluted share compared
to net income of $2.5 million or $0.20 per diluted share for the first
quarter of 2006. The Company noted that net income for the first
quarter of 2006 included an income tax benefit of $318,000.
Robert Stec, Chief Executive Officer, commented, "There is no
question that we have a challenging time in front of us. Even so, we
are making progress toward several key initiatives. We have greatly
improved our inventory level, begun the process of reducing our
operating expenses, and are working with our licensor to reposition
our brand with a more growth oriented approach. As we move through the
remainder of the year, it is our belief that we can position our
business to regain profitability and to resume growth."
The Company noted that gross profit margin decreased to 34.5% in
the first quarter of 2007 from 42.6% in the first quarter of 2006.
This decline was driven predominantly by a greater incidence of
off-priced sales, as the Company sought to reduce inventories.
Operating expense for the first quarter of fiscal 2007 was $6.9
million, or 48.6% of sales, compared to $6.7 million, or 31.5% of
sales in the prior year period. The Company noted that this year's
first quarter expenses included approximately $613,000 of severance
cost.
The Company also reported that order backlog as of March 31, 2007
was approximately $12.2 million, down from $29.2 million on March 31,
2006.
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. These
forward-looking statements are based on current expectations and
observations of the Company and its management. Words such as
"believes," "anticipates," "expects," "intends," "plans," and similar
expressions are intended to identify forward-looking statements but
are not the exclusive means of identifying such statements.
Forward-looking statements are statements that are subject to a
variety of risks and uncertainties, many of which are beyond the
Company's control and could cause actual results to differ materially
from those contemplated in such forward-looking statements, including,
though not limited to, the following specific risks and uncertainties:
(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,
both domestic and international, (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.
I.C. Isaacs & Company, Inc.
Consolidated Statements of Operations (Unaudited)
(000's omitted except per share data)
Three Months Ended
March 31,
-------------------
2007 2006
--------- ---------
Net sales $14,194 $21,263
Cost of sales 9,311 12,197
--------- ---------
Gross profit 4,883 9,066
--------- ---------
Operating Expenses
Selling 2,265 2,694
License fees 1,125 1,378
Distribution and shipping 636 611
General and administrative 2,279 2,038
Severance 613 --
--------- ---------
Total operating expenses 6,918 6,721
--------- ---------
Operating (loss) income (2,035) 2,345
--------- ---------
Other income (expense)
Interest, net of interest income (70) (82)
Other, net (1) 4
--------- ---------
Total other income (expense) (71) (78)
--------- ---------
(Loss) income before income taxes (2,106) 2,267
Income tax benefit -- 277
--------- ---------
Net (loss) income $(2,106) $2,544
--------- ---------
Basic (loss) income per share $(0.17) $0.21
Basic weighted average shares outstanding 12,283 11,996
Diluted (loss) income per share $(0.17) $0.20
Diluted weighted average shares outstanding 12,283 12,664
I.C. Isaacs & Company, Inc.
Consolidated Balance Sheets (Unaudited)
(000's omitted)
March 31, December 31,
2007 2006
------------ ------------
Assets
Current
Cash, including temporary investments of
$133 and $77 $542 525
Accounts receivable, less allowance for
doubtful accounts of $731 and $725 10,725 13,268
Inventories 7,342 10,492
Prepaid expenses and other 643 1,004
------------ ------------
Total current assets 19,252 25,289
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 3,242 3,233
Other assets 282 287
------------ ------------
$22,776 $28,809
============ ============
Liabilities And Stockholders' Equity
Current
Overdrafts $189 $8
Revolving line of credit -- 3,390
Current maturities of long-term debt 2,104 2,103
Accounts payable 1,105 2,831
Accrued expenses and other current
liabilities 2,534 1,806
------------ ------------
Total current liabilities 5,932 10,138
------------ ------------
Minimum pension liability 1,708 1,603
Stockholders' Equity
Preferred stock; $.0001 par value; 5,000
shares authorized, none outstanding -- --
Common stock; $.0001 par value; 50,000
shares authorized, 13,459 and 13,251
shares issued; 12,283 and 12,075 shares
outstanding 1 1
Additional paid-in capital 45,478 45,302
Accumulated deficit (22,714) (20,606)
Accumulated other comprehensive income (5,306) (5,306)
Treasury stock, at cost (1,177 shares) (2,323) (2,323)
------------ ------------
Total stockholders' equity 15,136 17,068
------------ ------------
$22,776 $28,809
============ ============
CONTACT: I.C. Isaacs & Company
Investor Relations:
Integrated Corporate Relations
James Palczynski, 203-682-8229