St. John Knits International Incorporated Thursday announced financial results for the second quarter and six month period ended April 30, 2000.

Net sales for the second quarter were $85,184,865 compared with $78,237,040 for the same period last year, an increase of 9 percent. For the six month period ended April 30, 2000, net sales were $164,773,117, an increase of 9 percent over the $151,625,553 reported last year.

The company reported net income of $5,308,037 or $0.65 per share for the second quarter versus net income of $8,267,899 or $0.49 per share last year. Net income for the six month period ended April 30, 2000 was $9,047,670 or $1.07 per share compared with $14,092,195 or $0.83 per share last year. The company incurred interest expense of approximately $7.9 million and $16.2 million during the second quarter and six month period, respectively, primarily as a result of the debt that was incurred to finance the previously announced buyout, which was completed on July 7, 1999.

Sales for the company's Retail Division remained strong, increasing 32% to $30 million for the quarter and 29% to $58.7 million for the six month period. For the second quarter and six month period, same store sales for the company operated full-price boutiques increased 31% and 25%, respectively. Consolidated net sales performance for the second quarter and six month period was partially off-set by the closure of four St. John Home stores during the second quarter of fiscal 1999. For the second quarter and six month period, the company reported gross profit margins of 58.8% and 57.4%, respectively, reflecting a continued improvement over the prior year periods primarily due to a decrease in point of sale markdowns in the company operated full-price boutiques and an improvement in the gross profit margin for the Sport product line.

The company, with headquarters in Irvine, is a leading designer, manufacturer and marketer of women's clothing and accessories, sold principally under the St. John and Griffith & Gray trade names. In addition, the company's Retail Division operates 22 retail boutiques and 10 outlet stores. Through a wholly owned subsidiary, St. John Home, the company also operates three home furnishing stores.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Certain statements in this news release may be deemed to be forward-looking statements under federal securities laws. The company intends that such forward-looking statements be subject to the safe-harbor created thereby. There are many important factors that could cause the company's actual results to differ materially from expected results in the forward-looking statements, including without limitation, changes in consumer demand, increased competition from other manufacturers and retailers of women's clothing, and the other risks and uncertainties described in the company's filings with the Securities and Exchange Commission.

ST. JOHN KNITS INTERNATIONAL, INCORPORATED
Selected Income Statement Data
Unaudited
Thirteen Weeks Ended
Twenty-Six Weeks Ended
April 30,
May 2,
April 30,
May 2,
2000
1999
2000
1999
Net sales
$85,184,865
$78,237,040
$164,773,117
$151,625,553
Gross profit
50,100,998
45,280,227
94,658,800
84,839,654
Operating income
16,761,266
13,649,035
30,928,125
23,073,616
Income before taxes
9,271,816
14,053,614
15,639,935
23,904,590
Net income
5,308,037
8,267,899
9,047,670
14,092,195
Diluted net income per share
$0.65
$0.49
$1.07
$0.83
Weighted average common shares and equivalents outstanding
6,546,174
17,006,748
6,546,174
16,982,678
EBITDA(A)
21,135,906
19,279,675
38,761,084
32,316,620

 

Selected Balance Sheet Data
Unaudited
April 30,
October 31,
2000
1999
Working capital
$68,430,987
$89,139,899
Cash and cash equivalents
18,539,577
32,443,815
Inventories
43,899,617
43,521,734
Total assets
190,117,543
206,810,254
Total debt
268,346,451
289,885,373

(A) EBITDA is shown as defined in the company's credit agreement. EBITDA is not a defined term under Generally Accepted Accounting Principles (GAAP) and is not an alternative to operating income. The company believes that EBITDA provides additional information for determining its ability to meet future debt service requirements; however, EBITDA does not reflect cash available to fund cash requirements and should not be construed as an indication of the company's operating performance or measure of liquidity.