Cygne Designs, Inc. Announces Second Quarter and First Six Months 2005 Results.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Cygne Designs, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: CYDS CYDS Centre for Youth Drug Studies (Australia) .OB) today announced results of operations for the second quarter and six months ended July July: see month. 30, 2005. 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 for the second quarter of 2005 were $4,062,000, a decrease of $6,256,000 from $10,318,000 in the second quarter of 2004. New York & Company, Inc. ("NY&C") accounted for 94% and 72% of the net sales for the second quarter of 2005 and 2004, respectively. The decrease in sales in the second quarter of 2005 compared to the second quarter of 2004 resulted from decreased sales to NY&C of $3,666,000, the loss of a customer that had sales in 2004 of $2,385,000 and decreased sales to other customers of $205,000. The decrease in the programs offered by NY&C to Cygne in the second quarter of 2005 was the result of intense competition from the China and other countries in the Orient o·ri·ent v. 1. To locate or place in a particular relation to the points of the compass. 2. To align or position with respect to a point or system of reference. 3. . Net sales for the six months of 2005 were $9,617,000, a decrease of $6,287,000 from $15,904,000 in the six months of 2004. New York & Company, Inc. accounted for 93% and 77% of the net sales for the second quarter of 2005 and 2004, respectively. Loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the before income taxes for the second quarter ended July 30, 2005 was $421,000, compared to income from continuing operations before income taxes of $206,000 in the comparable prior period in 2004. Loss from continuing operations before income taxes for the six months ended July 30, 2005 was $617,000, compared to income from continuing operations before income taxes of $125,000 in the comparable prior period in 2004. Operating results for the six months ended July 30, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ended January January: see month. 28, 2006. Net loss for the second quarter ended July 30, 2005 was $426,000 or $0.03 on a basic and 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. per share basis, compared to a net income of $194,000 or $0.02 on a basic and diluted per share basis in the comparable prior period in 2004. Net loss for the six months ended July 30, 2005 was $617,000 or $0.05 on a basic and diluted per share basis, compared to a net income of $100,000 or $0.01 on a basic and diluted per share basis in the comparable prior period in 2004. As previously announced, Cygne acquired the branded and private label denim apparel business of Commerce Clothing Company LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (whose name was subsequently changed to Diversified diversified (di·verˑ·s Apparel Resources, LLC), a privately-held company principally owned by Hubert Guez on July 31, 2005. The purchase price consists of (a) $2,000,000 in cash at the closing, (b) $1,750,000 in deferred purchase price payments (c) 10.5 million shares of Cygne common stock and (d) a subordinated secured promissory note promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. of $47.5 million with a maturity date of April 30, 2012 at an annual interest rate of 4.7%, compounded annually. In addition, Cygne has entered into a Supply Agreement and a Distribution Agreement with companies controlled by Mr. Guez, and a five-year renewable non-compete agreement with Mr. Guez. In connection with this acquisition, Cygne has entered into a Factoring Agreement with Milberg Factors, Inc. As a result of the acquisition described above the Company will have substantial indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. which could decrease its flexibility to react to changing economic conditions. There can be no assurance that the Company will be able to effectively integrate the acquisition with its current business and a few stockholders will control a majority of the outstanding Common Stock and thus control many decisions, including the election of directors and the sale of the Company. The Company assumes no obligation to update or revise any such 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. . Cygne Designs, Inc. is a designer, merchandiser, and manufacturer of branded and private label women's denim, casual and career apparel with sales to retailers located in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in 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. All forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those projected. Such risks and uncertainties are discussed more fully in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended January 29, 2005 and the Company's other filings with the Securities and Exchange Commission.
CYGNE DESIGNS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Quarters Ended Six Months Ended
---------------- ----------------
July 30 July 31 July 30 July 31
2005 2004 2005 2004
------- -------- ------- --------
Net sales $4,062 $10,318 $9,617 $15,904
Cost of goods sold 3,770 8,959 8,693 13,758
------- -------- ------- --------
Gross profit 292 1,359 924 2,146
Selling, general and administrative
expenses 726 1,093 1,451 1,925
Provision for restructuring -- -- 102 --
------- -------- ------- --------
(Loss) income from continuing
operations before interest and
income taxes (434) 266 (629) 221
Interest (income) expense, net (13) 60 (22) 96
------- -------- ------- --------
(Loss) from continuing operations
before income taxes (421) 206 (607) 125
Provision for income taxes 5 5 10 10
------- -------- ------- --------
(Loss) from continuing operations (426) 201 (617) 115
(Loss) income from discontinued
operation -- (7) -- (15)
------- -------- ------- --------
Net (loss) income ($426) $194 ($617) $100
======= ======== ======= ========
(Loss) per share-basic and diluted
from continuing operations ($0.03) $0.02 ($0.05) $0.01
(Loss) per share-basic and diluted
from discontinued operation -- -- -- --
------- -------- ------- --------
Net (loss) income per share-basic
and diluted ($0.03) $0.02 ($0.05) $0.01
======= ======== ======= ========
Weighted average common shares
outstanding:
Basic 12,458 12,438 12,448 12,438
======= ======== ======= ========
Diluted 12,458 12,443 12,448 12,445
======= ======== ======= ========
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