CORRECTING and REPLACING Maxwell Shoe Company Announces Second Quarter and Six Months Financial Results; Operating Income Rises 58.2% to $10.4 million.Business Editors CORRECTION...by Maxwell Maxwell is a common Scottish or Irish name that may refer to: People
HYDE PARK Hyde Park, park, London, England Hyde Park, 615 acres (249 hectares) in Westminster borough, London, England. Once the manor of Hyde, a part of the old Westminster Abbey property, it became a deer park under Henry VIII. , Mass.--(BUSINESS WIRE)--May 20, 2004 In BW5099 issued May 20, 2004: In first table (Statements of Income), Interest income, net under Three Months Ended April 30, 2004 should read: (274) sted (2) The corrected release reads: MAXWELL SHOE COMPANY ANNOUNCES SECOND QUARTER AND SIX MONTHS FINANCIAL RESULTS; OPERATING INCOME Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. RISES 58.2% TO $10.4 MILLION Company Again Raises Fiscal 2004 Sales and Earnings Guidance Maxwell Shoe Company Inc., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : MAXS), today announced financial results for the second fiscal quarter and six months ended April 30, 2004. In the second quarter: -- Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 27.6% to $73.7 million compared to $57.8 million in 2003; -- Operating income rose 58.2% to $10.4 million, or 14.1% of net sales compared to $6.6 million, or 11.4% of net sales, in 2003; -- Order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. increased 18.8% to $106.7 million compared to $89.8 million in 2003; -- Net income grew 8.3% to $4.5 million, or 6.0% of net sales, versus $4.1 million, or 7.1% of net sales, in 2003; -- Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 4.2% to $0.28 compared to $0.27 in 2003; and -- Excluding costs related to Jones Apparel Group Jones Apparel Group, Inc., a Fortune 500 company, is a leading designer, marketer and wholesaler of branded apparel, footwear and accessories. The company also markets directly to consumers through our chain of specialty retail and value-based stores, and operates the Barneys New , Inc.'s ("Jones") (NYSE NYSE See: New York Stock Exchange : JNY) unsolicited un·so·lic·it·ed adj. Not looked for or requested; unsought: an unsolicited manuscript; unsolicited opinions. unsolicited Adjective tender offer, diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings per share rose more than 51% to $0.41 compared to $0.27 in 2003. For the six months ended April 30, 2004: -- Net sales rose by 23.0% to $127.4 million compared to $103.5 million in 2003; -- Operating income increased by 52.0% to $15.6 million, or 12.2% of net sales compared to $10.3 million, or 9.9% of net sales, in 2003; -- Net income grew by 18.2% to $7.7 million, or 6.1% of net sales compared to $6.5 million, or 6.3% of net sales, in 2003; -- Diluted earnings per share increased by 14.1% to $0.49 compared to $0.43 in 2003; and -- Excluding costs related to Jones's unsolicited tender offer, diluted earnings per share rose over 44% to $0.62 compared to $0.43 in 2003. "We are extremely pleased with the results we reported today," stated Mark Cocozza, Chairman and Chief Executive Officer. "The second quarter marked the highest net sales quarter in our Company's history with net sales growth of 27.6% to $73.7 million, compared to $57.8 million in the second quarter of 2003. Operating income rose by approximately 58%, increasing faster than net sales, thus providing a true indication of our superior execution skills and efficient and disciplined approach to our business. With the second quarter, we also delivered our 18th consecutive quarter whereby we have met or exceeded expectations, which were given prior to costs related to the Jones tender offer. "We attribute (1) In relational database management, a field within a record. (2) In object technology, a single element of data. See instance attribute and static attribute. our ability to report sustained positive operating momentum to the ongoing success of our business model, which we have built over the past 20 years," Mr. Cocozza continued. "To this point, during the quarter, the platform we have created allowed us to successfully capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the trend toward feminine feminine /fem·i·nine/ (fem´i-nin) 1. pertaining to the female sex. 2. having qualities normally asociated with females. contemporary styled footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). - a core competency A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Gross profit dollars in the second quarter rose by 21.7% to $19.8 million, or 26.9% of net sales, compared to $16.3 million, or 28.2% of net sales, in the second quarter of 2003. A higher mix of private label sales versus the second fiscal quarter last year impacted gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. . Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. totaled $9.4 million, or 12.8% of net sales compared to $9.7 million, or 16.8% of net sales, in the second quarter of 2003. Gains in efficiency and disciplined expense management strategies enabled the Company to record a 400 basis point improvement in operating expenses as a percent of net sales. As a result, operating income increased by 58.2% to $10.4 million, or 14.1% of net sales, compared to $6.6 million, or 11.4% of net sales, in the prior year's second fiscal quarter. For the six months ended April 30, 2004, gross profit dollars rose by 18.9% to $34.1 million, or 26.8% of net sales, compared to $28.7 million, or 27.7% of sales, in the first six months of fiscal 2003. Operating expenses totaled $18.6 million and improved by 320 basis points to 14.6% of net sales from $18.5 million, or 17.8% of net sales, in the first six months of the prior fiscal year. Operating income reached $15.6 million, or 12.2% of net sales, increasing 52.0% from $10.3 million, or 9.9% of net sales in the first six months of fiscal 2003. The Company's balance sheet continued to strengthen. At quarter end, cash totaled $105.0 million, rising $25.5 million from $79.5 million at April 30, 2003. Inventory and accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying were on plan and current. Inventory totaled $16.3 million, representing a 6.6% decline from $17.4 million at April 30, 2003. Accounts receivable totaled $43.1 million, increasing 5.5%, as compared to $40.9 million at April 30, 2003 and well below the rate of sales growth. In addition, working capital increased by $19.5 million to $152.0 million from $132.5 million at April 30, 2003. Mr. Cocozza continued: "We are delighted with the success we achieved over the first half of the year and are confident that our strong performance will continue in the near and long term. In support of this is our quarter end backlog increase of approximately 19% that includes across the board growth for each of our brands. As we look ahead, our goals are focused on building preeminent pre·em·i·nent or pre-em·i·nent adj. Superior to or notable above all others; outstanding. See Synonyms at dominant, noted. [Middle English, from Latin prae footwear brands and we expect fiscal 2004 to be another year of significant accomplishments toward reaching this objective for Maxwell Shoe Company." "Given the current strength of our business and record backlog at quarter end, we are comfortable with increasing estimates for fiscal 2004," Mr. Cocozza stated further. "To this end, we currently estimate fiscal 2004 net sales in the range of $255 million to $260 million compared to our previous guidance of a range of $250 million to $255 million and actual fiscal 2003 net sales of $225 million. Fiscal 2004 diluted earnings per share are currently estimated in the range of $1.21 to $1.25 compared to our previous guidance of a range of $1.18 to $1.22 and fiscal 2003 actual diluted earnings per share of $0.98. Estimated 2004 diluted earnings per share does not include costs which have been or may be incurred related to Jones's unsolicited tender offer. Your Board of Directors maintains that Maxwell Shoe Company can continue to create value for all stockholders substantially in excess of Jones's inadequate $20.00 per share offer. This is demonstrated by the robust results we reported today and further supported by the Company's strong balance sheet and talented management team," he concluded. Interested stockholders and other persons are invited to listen to the second quarter earnings conference call scheduled for today, Thursday Thursday: see week. , May 20, 2004 at 10:00 a.m. Eastern Time. To participate in Maxwell Shoe Company's conference call dial 1-800-473-6123 approximately five minutes prior to the 10:00 a.m. Eastern start time. The call will also be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.viavid.com. An online archive will be available immediately following the call and will be accessible until May 27, 2004. Important Additional Information Maxwell Shoe Company Inc. ("Maxwell Shoe Company") filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") with the Securities and Exchange Commission ("SEC") on March 29, 2004, regarding Jones Apparel Group Inc.'s and MSC (1) (MSC.Software Corporation, Santa Ana, CA, www.mscsoftware.com) Founded in 1963 by Richard H. MacNeal and Robert G. Schwendler, MSC is the world's largest provider of mechanical computer aided engineering (MCAE) strategies, simulation software and services. Acquisition Corp.'s (together, "Jones") unsolicited tender offer for all the outstanding shares of Class A Common Stock of Maxwell Shoe Company at $20.00 per share, net to the seller in cash, without interest (the "Offer"). Maxwell Shoe Company stockholders should read the Schedule 14D-9 (including any amendments or supplements thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. ) because these documents contain important information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Offer and the related consent solicitation Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Notes: Should the majority of stakeholders provide valid consent prior to the consent expiry date, the issuer may then follow through with . On April 21, 2004, Jones filed a definitive consent solicitation statement with the SEC relating to Jones's proposed solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of consents of Maxwell Shoe Company stockholders to, among other things, remove all of Maxwell Shoe Company's current directors and replace them with Jones's nominees. In response, on April 23, 2004, Maxwell Shoe Company filed a definitive consent revocation The recall of some power or authority that has been granted. Revocation by the act of a party is intentional and voluntary, such as when a person cancels a Power of Attorney that he has given or a will that he has written. statement on Form DEFC DEFC Direct Ethanol Fuel Cell 14A (the "Definitive Consent Revocation Statement") with the SEC to counter Jones's consent solicitation. Maxwell Shoe Company stockholders should read the Definitive Consent Revocation Statement (including any amendments or supplements thereto) because it contains additional information important to the stockholders' interests in the Offer and the related consent solicitation. The Schedule 14D-9, the Definitive Consent Revocation Statement and other public filings made by Maxwell Shoe Company with the SEC are available free of charge at the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . Maxwell Shoe Company also will provide a copy of these materials free of charge at its website at www.maxwellshoe.com. About Maxwell Shoe Company Maxwell Shoe Company Inc. designs, develops and markets casual and dress footwear for women and children. The Company's brands include AK ANNE KLEIN Anne Klein (August 3, 1923 - March 19, 1974) was an American fashion designer whose label was continued by designer Donna Karan after Anne Klein's death. Anne Klein was born as Hannah Golofski in New York City on August 3, 1923. (R), DOCKERS
Dockers is a brand of Levi Strauss & Co. Levi Strauss & Co. (R)FOOTWEAR FOR WOMEN, J.G. HOOK, JOAN & DAVID David, in the Bible David, d. c.970 B.C., king of ancient Israel (c.1010–970 B.C.), successor of Saul. The Book of First Samuel introduces him as the youngest of eight sons who is anointed king by Samuel to replace Saul, who had been deemed a failure. , CIRCA JOAN & DAVID, MOOTSIES TOOTSIES AND SAM & LIBBY. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements made in this press release indicating Maxwell Shoe Company's, the Board of Directors' or management's intentions, beliefs, expectations, or predictions for the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are only predictions and may differ materially from actual future events or results. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause Maxwell Shoe Company's actual results to differ materially from those projected in such forward-looking statements. Such risks, assumptions and uncertainties include, but are not limited to: changing consumer preference; inability to successfully design, develop or market its footwear brands; the inability to successfully re-introduce Verb 1. re-introduce - introduce anew; "We haven't met in a long time, so let me reintroduce myself" reintroduce acquaint, introduce, present - cause to come to know personally; "permit me to acquaint you with my son"; "introduce the new neighbors to the the Joan & David brand Sir David Brand KCMG (1 August 1912-15 April 1979) was Premier of Western Australia from 1959-1971 and a Member of the Legislative Assembly from 1945-1975. Early life into the market; competition from other footwear manufacturers or retailers; loss of key employees; general economic conditions and adverse factors impacting the retail footwear industry; the inability by Maxwell Shoe Company to source its products due to political or economic factors; potential disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in supply chain or customer purchasing habits due to health concerns relating to severe acute respiratory syndrome Severe Acute Respiratory Syndrome (SARS) Definition Severe acute respiratory syndrome (SARS) is the first emergent and highly transmissible viral disease to appear during the twenty-first century. or other related illnesses; the imposition The printing of pages on a single sheet of paper in a particular order so that they come out in the correct sequence when cut and folded. of trade or duty restrictions or work stoppages of transportation or other workers who handle or manufacture Maxwell Shoe Company's goods. Additional risks, assumptions and uncertainties associated with the pending unsolicited tender offer by Jones Apparel Group, Inc. include: the risk that Maxwell Shoe Company's customers may delay or refrain from purchasing Maxwell Shoe Company products due to uncertainties about Maxwell Shoe Company's future; the risk that key employees may pursue other employment opportunities due to concerns as to their employment security with Maxwell Shoe Company; the risk that stockholder litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. commenced in connection with Jones Apparel Group Inc.'s unsolicited tender offer might result in significant costs of defense, indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from and liability; the risk that the Board of Directors' analysis and the basis of their recommendation to the stockholders ultimately may prove to be inaccurate; and other risks discussed in documents filed by Maxwell Shoe Company with the Securities and Exchange Commission. All forward-looking statements are qualified by these cautionary statements and are made only as of the date they are made. Maxwell Shoe Company is under no obligation (and expressly disclaims any such obligation) to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.
MAXWELL SHOE COMPANY INC.
STATEMENTS OF INCOME
(Unaudited-In Thousands Except Per Share Amounts)
Three Months Six Months
Ended Ended
April 30, April 30,
----------------- -------------------
2004 2003 2004 2003
-------- -------- --------- ---------
Net sales $73,745 $57,791 $127,362 $103,505
Cost of sales 53,915 41,497 93,218 74,799
-------- -------- --------- ---------
Gross profit 19,830 16,294 34,144 28,706
Operating expenses:
Selling 4,543 4,898 8,832 8,675
General and administrative 4,900 4,830 9,730 9,780
-------- -------- --------- ---------
9,443 9,728 18,562 18,455
-------- -------- --------- ---------
Operating income 10,387 6,566 15,582 10,251
Other expenses (income)
Interest income, net (274) (198) (521) (457)
Other, net (28) (93) (58) (203)
Costs related to unsolicited
tender offer 3,264 - 3,264 -
-------- -------- --------- ---------
2,962 (291) 2,685 (660)
-------- -------- --------- ---------
Income before income taxes 7,425 6,857 12,897 10,911
Income taxes 2,970 2,744 5,159 4,365
-------- -------- --------- ---------
Net income $ 4,455 $ 4,113 $ 7,738 $ 6,546
======== ======== ========= =========
Net income per share
Basic $.30 $.28 $.52 $.45
Diluted $.28 $.27 $.49 $.43
Shares used to compute net
income per share:
Basic 14,846 14,719 14,838 14,667
Diluted 15,728 15,134 15,649 15,101
MAXWELL SHOE COMPANY INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited -In Thousands Except Per Share Amounts)
April 30, October 31,
ASSETS 2004 2003
----------- -----------
Current assets:
Cash and cash equivalents $ 104,982 $ 97,063
Accounts receivable, trade (net of allowance
for doubtful accounts and discounts of
$1,072 in 2004 and $973 in 2003) 43,142 42,412
Inventory, net 16,253 14,226
Prepaid expenses 774 601
Deferred income taxes 1,648 1,648
----------- -----------
Total current assets 166,799 155,950
Property and equipment, net 2,456 2,609
Trademarks, net 14,462 14,462
Other assets 1 1
----------- -----------
$ 183,718 $ 173,022
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,743 $ 1,462
Accrued expenses 11,210 9,507
Accrued income taxes 820 1,274
----------- -----------
Total current liabilities 14,773 12,243
Long-term deferred income taxes 2,448 2,448
Stockholders' equity:
Class A common stock, par value $.01, 20,000
shares authorized, 14,861 shares outstanding
in 2004, 14,821 shares outstanding in 2003 148 148
Additional paid-in capital 53,068 52,845
Deferred compensation (212) (417)
Retained earnings 113,493 105,755
----------- -----------
Total stockholders' equity 166,497 158,331
----------- -----------
$ 183,718 $ 173,022
=========== ===========
RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE
EXCLUDING COSTS RELATED TO JONES APPAREL GROUP'S
UNSOLICITED TENDER OFFER TO U.S. GAAP DILUTED EARNINGS PER SHARE
(Unaudited-In Thousands Except Per Share Amounts)
In accordance with Regulation G, set forth below is a
reconciliation of diluted earnings per share excluding costs related
to Jones Apparel Group's unsolicited tender offer, a non U.S. GAAP
financial measure, to diluted earnings per share, its most directly
comparable financial measure computed in accordance with U.S. GAAP.
Three Months Six Months
Ended Ended
April 30, 2004 April 30, 2004
-------------- --------------
U.S. GAAP net income $4,455 $7,738
U.S. GAAP net income per share $.28 $.49
Add back:
Costs related to unsolicited tender
offer - net of tax 1,958 1,958
-------------- --------------
Adjusted net income $6,413 $9,696
============== ==============
Adjusted net income per share $.41 $.62
============== ==============
Shares used to compute adjusted net
income per share
Diluted 15,728 15,649
With respect to the range of projected fiscal year 2004 earnings per share information, the Company has determined that it is not able, without unreasonable efforts, to provide a reconciliation to a comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measure because of the difficulty in determining and projecting the costs associated with Jones's ongoing unsolicited tender offer, which depend on many factors, including, without limitation: the length, costs and outcome of litigation proceedings between the Company and Jones in two different courts related to the unsolicited tender offer and related consent solicitation; the duration of the tender offer and consent solicitation; whether or not, and when, Jones increases its offer price in its tender offer and by how much; whether or not, and when, Jones withdraws its unsolicited tender offer and consent solicitation and various other developments related to the Jones tender offer and consent solicitation that are not within the control of the Company. |
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