Hartmarx Corporation (NYSE:HMX, the producer of casual and golf apparel, today reported operating results for the third quarter ended August 31, 2000. Net earnings were $3.0 million, or $.10 per share, compared to $2.6 million, or $.08 per share last year, on revenues totaling $175.3 million compared to $185.6 million in 1999. Debt was 25 per cent lower than a year earlier.

Elbert 0 Hand, chairman and chief executive officer of Hartmarx, commented: "Despite adverse retail conditions, our third quarter net earnings improved 14 per cent from a higher gross margin rate and a greatly reduced debt burden which lowered interest expense despite higher rates. Operating margins reflected the continuing shift of our sales mix toward higher margin brands and products and more effective manufacturing.

"Overall, gross margins represented 27.3 per cent of sales in the quarter compared to 25.2 per cent last year. An 8 per cent revenue gain in our casual businesswear, sportswear and womenswear product offerings helped to offset the anticipated reduction in tailored clothing shipments. We have pursued a number of marketing initiatives designed to enhance the appeal of our core product lines to accommodate a variable dress code environment.

"Substantial debt reduction has continued. As of August 31, total debt of $158.8 million was below the year earlier level by $53.6 million, or 25 per cent. Book value has increased to $6.62 per share as of August 31 and for the trailing twelve months our free cash flow was $.51 per share. We have utilized the Company's strong cash flow to repurchase about 20% of our outstanding shares since early in 1999, while continuing to reduce borrowings. The combination of fewer shares and lower debt should be important contributors to future growth in earnings per share. Our improved balance sheet and strong cash flow enable us to finance the opportunities upon which we are focused for future growth," Mr Hand concluded.

For the nine months ended August 31, revenues were $511.0 million this year compared to $534.6 million last year. Net earnings this year before a second quarter extraordinary gain were $5.4 million, or $.18 per share, compared to last year's loss of $1.8 million, or $.05 per share. Last year's results included a $6.9 million, or $.21 per share, net of tax, non-cash charge related to the termination of a systems project. Excluding the non-cash charge, 1999's year-to-date earnings would have been $5.2 million, or $.15 per share. The extraordinary gain in 2000 was $.2 million, or $.01 per share, associated with purchases of $22.9 million of the Company's 10.875% Senior Subordinated Notes at favorable prices. Net earnings after the extraordinary gain were $5.6 million, or $.19 per share.

Hartmarx produces and markets business, casual and golf apparel under its own brands including Hart Schaffner & Marx, Hickey-Freeman, Palm Beach, Coppley, Cambridge, Keithmoor, Racquet Club, Pusser's of the West Indies, Royal, Brannoch, Riserva, John Alexander, Desert Classic, Sansabelt, Barrie Pace and Hawksley & Wight. In addition, the Company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Tommy Hilfiger, Kenneth Cole, Burberrys men's tailored clothing, Pringle of Scotland, Bobby Jones, Jack Nicklaus, Claiborne, Evan-Picone, Pierre Cardin, Perry Ellis, KM by Krizia, and Daniel Hechter. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs.


Hartmarx Corporation, Chicago
Third Quarter, 2000 Results
- Financial Summary -
Three months ended August 31, August 31,
2000 1999
Net sales $175,316,000 $185,566,000
Earnings before taxes 4,815,000 4,240,000
Tax provision 1,825,000 1,610,000
Net earnings 2,990,000 2,630,000
Earnings per share (basic and diluted): .10 .08
Average common shares and equivalents outstanding:
Basic 29,482,000 32,432,000
Diluted 29,593,000 32,517,000
Nine months ended August 31, August 31,
2000 1999(1)
Net sales $510,957,000 $534,648,000
Earnings (loss) before taxes
and extraordinary gain 8,635,000 (2,870,000)
Tax provision (benefit) 3,280,000 (1,095,000)
Earnings (loss) before
extraordinary gain 5,355,000 (1,775,000)
Extraordinary gain, net (2) 227,000 --
Net earnings (loss) 5,582,000 (1,775,000)
Earnings (loss) per share (basic and diluted):
Before extraordinary gain .18 (.05)
After extraordinary gain .19 (.05)
Average common shares and equivalents outstanding:
Basic 29,366,000 33,626,000
Diluted 29,480,000 33,692,000
(1) 1999 year-to-date results included a non-cash charge of $11.2 million pre-tax, ($6.9 million or $.21 per share after-tax), reflecting a write-down of capitalized development costs related to the termination of a systems project.
(2) Extraordinary gain in 2000, net of tax provision, related to purchases of the Company's 10.875% senior subordinated debentures.