USA: Sport-Haley, Inc. Reports Third Quarter Unaudited Results
Net sales decreased by approximately $66,000, or 1%, for the fiscal quarter ended March 31, 2000, as compared to the same quarter in the prior fiscal year. Net sales for the nine months ended March 31, 2000, were approximately $17.77 million. This is a decrease of approximately $3.05 million, or 15%, from the prior comparable period.
Management attributes the decrease in net sales for the nine months ended March 31, 2000, to fewer orders placed by golf professional shops for the Fall 1999 season, continued reduction of prior seasons' finished goods inventories at reduced sales prices, and relatively flat sales in the intensely competitive golf apparel market as a whole.
As a percentage of net sales, gross profit was approximately 23% and 27% for the fiscal quarter and nine months ended March 31, 2000, respectively, as compared with approximately 30% and 34% for the same periods in the prior fiscal year.
The decrease in gross profit is due to a combination of factors, including the disposal of excess prior seasons' finished goods inventories at reduced sales prices, inventory adjustments, and increases in indirect allocable costs. Because those factors are expected to continue through the following fiscal quarter, management anticipates that the gross profit for the fiscal quarter ending June 30, 2000, will approximate the gross profit achieved in the fiscal quarter ended March 31, 2000.
Because of recently implemented marketing strategies designed to promote brand identity and loyalty for the Company's products, management's continued efforts to control costs, management's successful efforts to reduce prior seasons' finished goods inventories in Fiscal 2000, the implementation of improved controls relating to levels of production for seasonal merchandise, and advance orders received for the Fall 2000 season, management expects gross profit margins for Fiscal 2001 will more closely approximate gross margins historically achieved by the Company.
Earnings for the fiscal quarter ended March 31, 2000, were approximately $156,000, a decrease of approximately $249,000, or 61%, as compared with the same quarter in the prior fiscal year. Basic and diluted earnings per share for the fiscal quarter ended March 31, 2000, were $0.04 per share compared to $0.09 per share for the same quarter in the prior fiscal year, based on 3,687,661 and 4,401,152 average weighted shares outstanding, respectively.
Earnings for the nine months ended March 31, 2000, were approximately $180,000, a decrease of $1.3 million, or approximately 88%, as compared with the same nine-month period in the prior fiscal year. Basic and diluted earnings per share for the nine months ended March 31, 2000, were $0.05 per share compared to $0.34 per share for the same nine-month period in the prior fiscal year, based on 3,784,379 and 4,443,072 average weighted shares outstanding, respectively.
Earnings for the nine months ended March 31, 2000, reflect pre-tax losses of approximately $259,000 from the disposition of the Company's headwear manufacturing equipment. The Company discontinued the manufacturing and sale of headwear during the fiscal year ended June 30, 1999, and had disposed of all inventories and equipment relating to headwear as of December 31, 1999.
Sport-Haley, Inc. designs, contracts for the manufacture of, and markets quality men's and women's fashion golf apparel and outerwear under the Haley label. The Company's apparel is sold in the premium and mid-priced markets through a network of independent sales representatives and distributed to golf course professional shops, country clubs, and resorts across the United States and internationally.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: the statements contained in this release which are not historical facts may be deemed to contain forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties, including, without limitation: business conditions and growth in the fashion golf apparel market and the general economy; competitive factors; price pressures in the high-end market; inventory risks due to shifts in market demand and/or price erosion of purchased apparel, raw fabric and trim; changes in product mix; and other risks or uncertainties detailed in the Company's Securities and Exchange Commission filings.
Consolidated Unaudited Financial Information
(In thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
2000 1999 2000 1999
Statement of Income
Net sales $7,837 $7,903 $17,771 $20,823
Income from continuing
provision for income
taxes and minority
interest 258 660 443 2,237
Loss from discontinued
operations, net of
taxes -- (19) -- (46)
Loss on disposal of
assets, net of taxes -- -- (158) --
Net income 156 405 180 1,504
Earnings per common
share $0.04 $0.09 $0.05 $0.34
Average weighted shares
outstanding 3,688 4,401 3,784 4,443
Balance Sheet Data:
Working capital $25,292 $28,437
Current assets 26,638 30,353
Total assets 29,684 33,428
Current liabilities 1,346 1,916
Long-term liabilities -- --
Minority interest -- (89)
Stockholders' equity 28,338 31,601
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