Biscayne Apparel announces third quarter operating results.

CLIFTON, N.J.--(BUSINESS WIRE)--Nov. 8, 1995--Biscayne Apparel Inc. (ASE:BHA) Wednesday announced its operating results for the third quarter ended Sept. 30, 1995.

Net sales in the 1995 third quarter were $40.9 million, compared to $34.4 million in the third quarter of 1994. Net income in the 1995 third quarter was $1.4 million, or $0.12 per share, vs. net income of $3.1 million, or $0.33 per share, in the third quarter of 1994.

Biscayne's net sales for the nine months ended Sept. 30, 1995 were $70.8 million, compared to $50.4 million in the first nine months of 1994. Net loss for the first nine months was $2.0 million, or $0.19 per share, compared to net income of $1.4 million, or $0.14 per share, in the first nine months of 1994.

The increase in 1995 net sales reflect the inclusion of M&L International Inc., a designer and manufacturer of infants', toddlers', and children's outerwear, sportswear and swimwear, which was acquired on Nov. 30, 1994. Biscayne's consolidated sales backlog as of Sept. 30, 1995 was $28.8 million vs. $31.6 million as of Sept. 30, 1994.

John E. Pollack, president and chief executive officer, said: "Several unusual factors combined in 1995 to create an unfavorable operating environment for the period ended Sept. 30. Last year was one of the warmest winters in recent history and had a significant impact on the poor performance of ladies' apparel and particularly on outerwear and coat sales. This factor resulted in high levels of inventory carryover from 1994 to 1995. The problem was exacerbated as stagnant apparel sales and warm weather continued into the 1995 season and prompted retailers to delay and reduce their 1995 fall programs. Our largest customer, a major warehouse retailer, refrained from ordering previously programmed fall outerwear from our company in 1995."

Pollack added: "Our 1995 operating margins have been adversely affected by the impact of several unusual factors, including: increased raw material costs, particularly cotton, which is selling at one of the highest levels in its history; increased labor expense, which has affected the operating margins of both our domestic manufacturing operations and those in the Philippines; and start-up expenses at our new manufacturing facility in Honduras. Unless the weather becomes colder and consumer demand and retail orders increase significantly in the next few weeks, we anticipate that the 1995 fourth quarter will be significantly below results of the 1994 fourth quarter."

Pollack continued: "In an effort to improve our long-term sales and profitability, we have undertaken several activities, including: re-evaluating our operating costs and design and marketing structure, redesigning our 1996 apparel lines, introducing new private label programs for mass merchants, and expanding our offshore manufacturing capacity by opening a manufacturing facility in Honduras. As a result, we believe that our operating performance in 1996 will show significant improvement when compared to 1995."

Biscayne Apparel Inc. is a designer, manufacturer and importer of diversified apparel and has the following operations: Andy Johns Fashions International - women's and children's outerwear; M&L International Inc. - infants', toddlers', and children's outerwear, sportswear and swimwear; Mackintosh of New England Co. - women's woolen coats and active outerwear; and Varon - girls' and boys' underwear and girls' daywear. Biscayne owns a minority interest in Hartwell Sports Inc., which manufactures casual jackets, knit shirts, and activewear.

Additional information on Biscayne Apparel Inc. is available on the Internet World Wide Web at this address: http://www.cfonews.com/bha.

Further news is available by E-mail at CFO @ panix.com with the subject bha. Investors without Internet service may dial by modem to 718/279-3590. -0-

                         BISCAYNE APPAREL INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands of dollars, except per share data)
                              (Unaudited)

                      THREE MONTHS ENDED    NINE MONTHS ENDED
                          SEPT. 30,             SEPT. 30,
                        1995      1994        1995      1994

Net sales             $40,898   $34,446     $70,804   $50,360

Operating costs and
expenses:
 Cost of goods sold    30,291     24,463     53,009    36,690
 Selling, general
  and administrative    7,069      4,251     18,501    10,289

Operating income (loss) 3,538      5,732       (706)    3,381

Other income and
(expenses):
 Interest and other
  expenses             (1,033)     (603)     (2,425)   (1,119)
 Interest and other
  income                   --         4          58        61
 Equity in net income
  of investees             59       (33)        142        --

Earnings (loss) before
 provision (benefit)
 for income taxes       2,564     5,100      (2,931)    2,323

Provision (benefit)
 for income taxes       1,209     2,023        (911)      965

Net earnings (loss)  $  1,355   $ 3,077    $ (2,020)  $  1,358

Net earnings (loss)
 per common share    $   0.12   $  0.33    $  (0.19)  $   0.14

Shares used in
 computing net
 earnings (loss)
 per common share   10,864,004  9,398,565  10,730,943  9,438,827

                            PRO FORMA
                     BISCAYNE APPAREL INC. &
                      M&L INTERNATIONAL INC.
                    THREE MONTHS  NINE MONTHS
                       ENDED        ENDED
                      SEPT. 30,    SEPT. 30,
                        1994         1994

Net sales             $57,276      $89,605

Operating costs and
 expenses:
 Cost of goods sold    39,707       63,248
 Selling, general
  and administrative    8,141       19,786

Operating income (loss) 9,428        6,571

Other income and
 (expenses):
 Interest and other
  expenses               (981)      (1,960)
 Interest and other
  income                    8           69
 Equity in net income
  of investees           (111)         (16)

Earnings (loss) before
 provision (benefit)
 for income taxes       8,344        4,664

Provision (benefit)
 for income taxes       3,258        1,825

Net earnings (loss)  $  5,086      $ 2,839

Net earnings (loss)
 per common share    $   0.46      $  0.25

Shares used in
 computing net
 earnings (loss)
 per common share   11,148,912   11,189,174

                         BISCAYNE APPAREL INC.
                     CONSOLIDATED BALANCE SHEETS
                        (Dollars in thousands)

                                 SEPT. 30,      DEC. 31,
                                   1995          1994
                                (Unaudited)
ASSETS

Current assets:
 Cash and cash equivalents       $  1,830       $  4,178
 Trade accounts receivable,
  less allowances of $2,256
  in 1995 and $1,754 in 1994       27,923         21,009
 Inventories                       37,963         22,584
 Prepaid expenses and other         1,518            833
   Total current assets            69,234         48,604

Property, plant and equipment,
 less accumulated depreciation
 of $1,822 in 1995 and $1,388 in
 1994                               3,483          2,984
Investment in Hartwell Sports Inc.  1,647          1,505
Goodwill, net                       5,114          5,202
Other assets, net                   3,101          2,142
                                 $ 82,579       $ 60,437

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                $  7,212       $  6,060
 Accrued liabilities                6,184          6,973
 Notes payable to banks            31,250          8,500
 Current portion of long-term debt  1,250             --
 Senior subordinated bridge notes      --          4,776
   Total current liabilities       45,896         26,309

Subordinated notes                  6,444          7,944
Long-term debt                      6,250             --
Other liabilities                      64            303

Commitments and contingencies          --             --

Stockholders' Equity:
 Common stock, $0.01 par value;
 25,000,000 shares authorized;
 10,741,239 issued and outstanding
 in 1995 and 10,233,899 in 1994       107            102
Additional paid-in capital         26,308         25,225
Unearned stock award compensation    (152)          (203)
Retained earnings (deficit)        (2,338)           757
   Total stockholders' equity      23,925         25,881
                                 $ 82,579       $ 60,437

                         BISCAYNE APPAREL INC.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (Dollars in thousands)
                             (Unaudited)

                                   NINE MONTHS ENDED
                                       SEPT. 30,
                                     1995      1994
Operating activities:
 Net earnings (loss)              $ (2,020)  $  1,358
 Adjustments to reconcile net
  earnings (loss) to net cash
  used in operating activities:
   Gain (loss) on sale of assets        (3)        12
   Equity in net income of
    investee                          (142)        --
   Amortization of unearned stock
    award compensation                  51         51
   Depreciation expense                436        298
   Amortization expense                 63        159
   Provision for losses and sales
    allowances on receivables        3,086      2,262

(Increase) decrease in operating
assets:
 Trade accounts receivable         (10,000)   (13,021)
 Inventories                       (15,379)    (7,447)
 Prepaid expenses and other           (685)      (671)
 Other assets                         (942)       (56)

Increase (decrease) in operating
liabilities:
 Accounts payable                    1,152      2,377
 Accrued liabilities                  (773)       340
 Other liabilities                    (231)        (6)

  Net cash used in operating
   activities                      (25,387)   (14,344)

Investing activities:
 Proceeds from sale of assets            9          1
 Capital expenditures                 (941)      (933)
 Equity investment                      --     (1,500)
 Proceeds from sale of equity
  investee                              --         50

  Net cash used in investing
   activities                         (932)    (2,382)

Financing activities:
 Payments under notes payable to
  banks                            (24,025)   (31,060)
 Borrowings under notes payable
  to banks                          46,775     47,810
 Proceeds from term loan             7,500         --
 Repayment of subordinated notes    (6,276)        --
 Principal payments of capital
  leases                               (16)       (28)
 Proceeds from exercise of
  employee stock options                13         --

  Net cash provided by financing
   activities                       23,971     16,722

Net decrease in cash and cash
 equivalents                        (2,348)        (4)
Cash and cash equivalents at
 beginning of year                   4,178      1,568

Cash and cash equivalents at
 end of year                      $  1,830   $  1,564

Supplemental disclosure information:
 Interest expense paid            $  2,045   $    902
 Income taxes paid                $  1,608   $    784

CONTACT: Biscayne Apparel Inc., Clifton

Peter Vandenberg Jr., Vice President

& Chief Financial Officer,

201/473-3240

or

A. Richard Hurwitz, Vice President, Corporate

Communications, 305/858-2200