Cutter & Buck Reports First Quarter Fiscal Year 2002 Operating Results.Business Editors SEATTLE--(BUSINESS WIRE)--Sept. 13, 2001 Cutter cutter, small, one-masted sailing vessel, with a rig similar to that of a sloop except that it usually has a sliding bowsprit and a topmast. From 1800 to 1830 cutters were in service between England and France. & Buck Buck after murder of his master, leads wolf pack. [Am. Lit.: The Call of the Wild] See : Dogs Buck clever and temerarious dog perseveres in the Klondike. [Am. Lit.: Call of the Wild] See : Resourcefulness Inc. (Nasdaq:CBUK) today reported sales and earnings for its first quarter fiscal year 2002, ended July July: see month. 31, 2001. First Quarter Results: -- Net sales decreased 3.3% to $37.7 million, compared to $39.0 million for the same quarter last year -- Gross margins were 43.7%, compared to 44.9% in last year's first quarter -- Net loss was $1.4 million, compared to net income of $1.3 million in the same quarter last year -- Net loss per diluted share was $0.13 compared to net income per diluted share of $0.13 last year -- Positive free cash flow (operating cash flow less capital expenditures) of $6.8 million compared to a negative $3.4 million during the first quarter last year "Our results for the first quarter came in at the high end of our expectations, which keeps us on track to achieve our stated goals for fiscal year 2002," commented Harvey Jones Harvey M. Jones (April 15, 1921 - December 13, 1998) was an American football running back in the NFL for the Cleveland Rams and the Washington Redskins. He played college football for Baylor University. , Chairman & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We still see full year earnings per share in the range of $0.31-$0.38 and positive free cash flow for the year. During the first quarter, sales to our golf and corporate channels declined 5.3% and 4.3% respectively, compared to a year ago, as a result of unfavorable economic and industry conditions. Sales to our specialty retail channel posted a 14.1% decrease from the first quarter a year ago, primarily due to the timing of shipments occurring later in the Fall season." "We recently concluded a successful tournament season including a strong presence at the PGA Championship The PGA Championship (often referred to as the U.S. PGA Championship outside of North America) is an annual golf tournament conducted by the Professional Golfers Association of America as part of the PGA Tour. , U.S. Open The term U.S. Open is applied to "open" United States national championships in a particular sport, in which anybody, amateur or professional, American or non-American may compete. These include:
Biennial team golf event first held in 1927. It was originally played between teams of golfers from the U.S. and Britain; since 1979 players opposing the U.S. have been chosen from all of Europe. The trophy was donated by the British seed merchant Samuel Ryder. . Despite a tough retail economy, we just finished our busiest men's wear trade show in the history of the Company and received very positive reactions to our new Spring collections. In addition, we completed the expansion of our flagship, company-owned retail store in Pacific Place in Seattle Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. , WA, and signed a lease for a 4,000 sq. ft. retail location in Naples, Florida Naples is a city in Collier County, Florida, USA. As of 1 July 2006, the U.S. Census Bureau estimated the city's population at 21,804.[3] Naples is the County seat of Collier County, and is a Principal City of the Naples-Marco Island, Florida Metropolitan Statistical , which will be our last new store for fiscal year 2002." "Overall Fall bookings, while down slightly year-over-year, are tracking favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to our bookings plan," said Marty Marks, President & COO (Cell Of Origin) See mobile positioning. . "We expect to achieve a higher volume of in-season business in our golf channel as buyers are reacting to the tough industry conditions by placing orders closer to need. Our specialty retail channel bookings are ahead of plan which we believe reflects the strong acceptance of our fashion sportswear. Corporate channel bookings are behind last year's levels but are currently outperforming our plan." "We are focused on achieving our main strategic objective for fiscal year 2002 which is to produce the best possible short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. results while continuing to invest in new businesses that we believe will provide long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth in sales and profits for Cutter & Buck," continued Marks. "We are focused on controlling the growth of our fixed expenses during fiscal year 2002 including targeted cut backs in discretionary spending. However, our current cost structure reflects a higher level of fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). associated with our ongoing and historical investments in strategic growth initiatives including women's apparel, company-owned retail stores and e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. . As planned, this will cause 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. to slightly outpace out·pace tr.v. out·paced, out·pac·ing, out·pac·es To surpass or outdo (another), as in speed, growth, or performance. outpace Verb [-pacing, our sales expectations for the year, reflecting our strategy to develop a number of strong inter-related profit centers for our brand." "We ended the quarter in a strong financial position," added Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Lowber, Vice President & CFO See Chief Financial Officer. , "with over $4 million in cash and $35 million available under our credit facility. We accomplished the increase in first quarter free cash flow mainly through focused 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 management and capital expenditure controls. We successfully executed our financial management goals during the quarter and remain confident in our ability to achieve both profitability and positive free cash flow for fiscal year 2002." "Our inventories grew as expected by 36.9% compared to the same period a year ago as we took delivery of our Fall fashion merchandise and received Classics merchandise representing the last of our large production commitments made last year," continued Lowber. "Over half of our inventory is comprised of Classics merchandise, which we sell from season-to-season. As our reduced buying volumes lower our level of Classics merchandise, we expect inventories to be in line with sales by the end of the fiscal year." "The economy continues to be challenging. We are committed to executing our business plan to ensure we succeed in the current difficult environment and have the necessary growth drivers in place to take advantage of future opportunities when the economy recovers," concluded Jones. Earnings Outlook: The Company is unable to predict how economic and industry conditions will be affected by the national tragedy that occurred on Tuesday Tuesday: see week. , September September: see month. 11, 2001. Subject to the effect this may have, the Company is re-affirming its previous guidance for fiscal year 2002 of earnings per share in the $0.31-$0.38 range. We expect second quarter fiscal year 2002 earnings per share to be in the range of $0.02 to $0.05, on a two to five percent reduction in 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 . Cutter & Buck's FY 2002 first quarter earnings conference call to discuss earnings results and the business outlook for the remainder of fiscal year 2002 will be held today at 4:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , and is available live and on-demand On-Demand refers to a service or feature which addresses the user's need for instant gratification and immediacy of use. In most cases the value proposition for an on-demand service is wrapped up in the fact that the user or consumer of the service avoids a significant up-front at www.cutterbuck.com. Statements made in this news release that are not historical facts are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information. Actual results may differ materially from those projected in any forward-looking information. Specifically, there are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Those factor include, but are not limited to, style changes and product acceptance, relations with and performance of suppliers, the ability of the Company to control costs and expenses, the ability of the Company to carry out successful design and planned product and brand messaging/extension activities and to penetrate its chosen distribution channels, competition, access to capital, foreign currency risks, risks associated with opening and operating retail locations, risks associated with the Company's entry into new markets or distribution channels, technological change, political and trade relations, the overall level of consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. on apparel and global economic conditions. Additional information on these and other factors, which could affect the Company's financial results, are included in its Securities and Exchange Commission filings. Finally, there may be other factors not mentioned above or included in the Company's SEC filings that may cause actual results to differ materially from any forward-looking information. You should not place undue reliance on these 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. . The Company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by Securities laws. Cutter & Buck designs and markets upscale sportswear and outerwear under the Cutter & Buck brand. The Company is committed to achieving commercial success in a way that respects people, communities and the environment. The Company sells its products primarily through golf pro shops and resorts, corporate accounts and specialty retail accounts. Cutter & Buck products feature distinctive, comfortable designs, high quality materials and manufacturing and rich detailing.
FINANCIAL HIGHLIGHTS
(unaudited)($ in thousands, except per share data)
Condensed Consolidated Statements of Operations
Three months ended July 31,
---------------------------------
2001 2000
------------- ------------
Net sales $ 37,731 $39,029
Total cost of goods sold 21,230 21,512
------------- ------------
Gross profit 16,501 17,517
Operating expenses
Design and production 1,268 955
Selling and shipping 12,455 11,001
General and administrative 4,590 3,318
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Total operating expenses 18,313 15,274
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Operating income (loss) (1,812) 2,243
Other expense (443) (111)
------------- ------------
Income (loss) before income taxes (2,255) 2,132
Income taxes (benefits) (903) 810
------------- ------------
Net income (loss) $ (1,352) $ 1,322
============= ============
Basic earnings (loss) per share $ (0.13) $ 0.13
============= ============
Diluted earnings (loss) per share $ (0.13) $ 0.13
============= ============
Shares used in computation of:
Basic earnings (loss) per share 10,584 10,379
Diluted earnings (loss) per share 10,584 10,453
Condensed Consolidated Balance Sheets
July 31, April 30, July 31,
2001 2001 2000
---------- --------- ---------
(audited)
Current Assets:
Cash and cash equivalents $ 4,363 $ 8,073 $ 4,036
Accounts receivable 30,077 48,518 41,741
Inventories 60,066 53,553 43,881
Other current assets 9,015 7,997 5,783
---------- --------- ---------
Total current assets 103,521 118,141 95,441
Furniture and equipment, net 22,188 23,192 19,531
Other assets 1,606 1,620 548
---------- --------- ---------
Total assets $ 127,315 $142,953 $115,520
========== ========= =========
Liabilities & Stockholders' Equity
Current Liabilities:
Short-term borrowings $ 8,376 $18,732 $ 3,232
Accounts payable 10,075 12,886 10,490
Accrued liabilities and other
liabilities 3,232 4,396 3,661
Current portion of long-term debt 2,733 2,737 1,397
---------- --------- ---------
Total current liabilities 24,416 38,751 18,780
Long-term debt, net of current
portion, and other liabilities 10,572 10,937 6,408
Total shareholders' equity 92,327 93,265 90,332
---------- --------- ---------
Total liabilities & shareholders'
equity $ 127,315 $142,953 $115,520
========== ========= =========
SUMMARY OF FALL BOOKINGS (in thousands)
Fall 2001 Fall 2000 Percentage Difference
FY 2002 FY 2001 Change
---------- ---------- ------- -------
(as of (as of
09/11/01) 09/11/00)
GOLF $ 27,737 $ 31,542 -12.1% $(3,805)
SPECIALTY STORE 14,427 12,230 18.0% 2,197
CORPORATE ACCOUNTS 23,745 26,968 -12.0% (3,223)
OTHER 5,098 2,462 107.1% 2,636
---------- ---------- -------
TOTAL DOMESTIC FALL
BOOKINGS 71,007 73,202 -3.0% (2,195)
TOTAL INTERNATIONAL
FALL BOOKINGS 4,391 4,997 -12.1% (606)
---------- ---------- -------
TOTAL FALL BOOKINGS $ 75,398 $ 78,199 -3.6% $(2,801)
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SUMMARY OF NET SALES INVOICED - THREE MONTHS ENDED July 31
(in thousands)
FY 2002 FY 2001 Percentage Difference
Change
---------- ---------- ------- -------
GOLF $ 12,334 $ 13,028 -5.3% $ (694)
SPECIALTY STORE 4,266 4,965 -14.1% (699)
CORPORATE ACCOUNTS 14,701 15,369 -4.3% (668)
OTHER 4,333 2,824 53.4% 1,509
---------- ----------
TOTAL DOMESTIC
NET SALES 35,634 36,186 -1.5% (552)
TOTAL INTERNATIONAL
NET SALES 2,097 2,843 -26.2% (746)
---------- ----------
TOTAL NET SALES $ 37,731 $ 39,029 -3.3% (1,298)
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