Cygne Designs, Inc. announces fourth quarter and year-end results.NEW YORK--(BUSINESS WIRE)--May 3, 1996--Cygne Designs, Inc. (Nasdaq:CYDS CYDS Centre for Youth Drug Studies (Australia) ) today announced results of operations for the fourth quarter and fiscal year ended February 3, 1996. 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 fourth quarter were $119.5 million compared to $157.4 million for the comparable prior year period. The Company incurred a net loss of $73.0 million, or $5.87 per share, in the fourth quarter (including a loss of approximately $31.2 million, or $2.51 per share, on the sale in February 1996 of its GJM GJM Golden Jubilee Medal GJM Gay Japanese Male business) compared to net income of $4.6 million, or $0.35 per share, in the fourth quarter of 1994 (ended January 28, 1995). Net sales for the fiscal year ended February 3, 1996 were $540.1 million compared to $516.1 million for the prior year. The Company incurred a net loss of $126.0 million, or $10.04 per share, for the year ended February 3, 1996 (including an aggregate of approximately $75.9 million resulting from the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of goodwill associated with the FWM FWM Four-Wave Mixing FWM Fabric Workshop and Museum (Philadelphia, Pennsylvania) FWM Free Wheelchair Mission FWM Fine With Me FWM Fachverband Werbung Und Marktkommunikation acquisition and the loss on the sale of the GJM business) compared to net income of $10.8 million, or $0.93 per share, for the prior year. On combined pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, giving effect to the April 1994 acquisition of FWM and the October 1994 acquisition of GJM as of January 30, 1994, net sales for the year ended January 28, 1995 were $592.7 million and net income was $9.4 million, or $0.75 per share on a pro forma weighted average number of shares outstanding of 12,470,000. If the sale of the GJM business and the proposed sale of the Company's Ann Taylor Notable people named Ann Taylor include:
v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: customers. If the proposed transaction with Ann Taylor is consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , the Company anticipates that its primary customer will be The Limited, Inc., although there can be no assurance in this regard. During the year ended February 3, 1996 and excluding net sales of GJM, the Company had net sales to The Limited, Inc. of approximately $113.9 million. The Company also stated that it continues to be in non-compliance with the financial covenants in its bank credit agreement and that its trade credit facility remains suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. as a result of the failure to make payments thereunder when due. At May 2, 1996, the Company had approximately $38 million outstanding under these facilities. The Company is engaged in active discussions with its bank lender to amend these covenants to bring the Company into compliance, and believes that it will be able to obtain amendments or waivers with respect to its bank credit agreement in the near future. There can be no assurance, however, with respect to the timing or the nature of the outcome of these negotiations. In connection with these negotiations, the Company has requested an extension of 15 days for the time to file its 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. as permitted under the federal securities laws. The purpose of the extension is to permit the Company to attempt to conclude negotiations with its bank lender because the outcome of these negotiations will impact how the Company conducts its business, the Company's responses to other disclosures required by Form 10-K and the type of audit report which may be rendered on the Company's financial statements as of February 3, 1996. In connection with the February 1996 sale of its GJM intimate apparel and sleepwear business to Warnaco Inc., Warnaco paid Cygne $12.5 million in cash and assumed certain liabilities of the GJM business. Warnaco is also holding an additional $1.5 million in a treasury security to secure its obligations to make post-closing payments based upon a formula that provides, to the extent that net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. (as defined in the purchase agreement) acquired by Warnaco exceed $8.1 million, Warnaco will pay Cygne the $1.5 million held in a treasury security and the amount by which the net assets exceeds $8.1 million. To the extent such net assets are less than $8.1 million, Cygne will pay Warnaco the difference first by applying up to $1.5 million being held in a treasury security by Warnaco against the amount the net assets fall below $8.1 million and thereafter will pay Warnaco any further difference below $6.6 million in net assets. Warnaco has informed the Company that it believes the net assets acquired aggregated only $1.6 million, and that the Company owes Warnaco $6.5 million, of which $1.5 million would be satisfied through the treasury security. The Company disagrees with Warnaco's calculations but cannot predict the outcome of this dispute. At the time the dispute is resolved, and depending on the determination of the value of the net assets acquired by Warnaco, the Company may recognize an increase or a decrease in the loss of approximately $31.2 million on the sale of GJM. In April 1996, the Company entered into an agreement in principle with AnnTaylor Stores Corporation pursuant to which Ann Taylor will acquire Cygne's 60% in CAT, Cygne's sourcing joint venture with Ann Taylor, and the assets of Cygne's Ann Taylor Woven A woven is a cloth formed by weaving. It only stretches in the Bias directions (between the warp and weft directions), unless the threads are elastic. Woven cloth usually frays at the edges, unless measures are taken to counter this, such as the use of pinking shears or hemming. Division that are used in sourcing merchandise for Ann Taylor. The aggregate consideration to be paid to Cygne in the transaction consists of unregistered shares of Ann Taylor common stock having a market value of $36 million (based on the market price of the Ann Taylor common stock for the ten trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. prior to closing), but in no event is Ann Taylor obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to issue more than 2.5 million shares, and cash in an amount equal to the tangible net book value of the inventory and fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of Cygne's Ann Taylor Woven Division, less certain assumed liabilities of the division. The closing of the transaction is subject to various conditions including the negotiation and execution of definitive documentation, approval by the Company's stockholders, the Company's receipt of a fairness opinion Fairness Opinion A report put together by qualified analysts or advisors providing to key decision makers an evaluation of and facts about a merger or acquisition. Notes: A fairness opinion serves as a document used for guidance in a merger, takeover, or acquisition. from its financial advisor, the consent of the Company's and Ann ANN, Scotch law. Half a year's stipend over and above what is owing for the incumbency due to a minister's relict, or child, or next of kin, after his decease. Wishaw. Also, an abbreviation of annus, year; also of annates. In the old law French writers, ann or rather an, signifies a year. Taylor's lenders and the continuation of CAT's $40 million credit facility. It is currently anticipated that the transaction will close in July 1996, although there can be no assurance that the transaction will be consummated in this time frame, on these terms, on different terms or at all. In order to facilitate the integration of CAT and Cygne's Ann Taylor Woven Division into Ann Taylor's operations, Cygne has agreed to make available for a three year period the services of Mr. Bernard Ber·nard , Claude 1813-1878. French physiologist noted for his study of the digestive and nervous systems. Manuel, the Company's Chief Executive Officer, and Mr. Irving Benson Irving Benson was a standup comic in the Borscht Belt or Vaudeville tradition. He resembled Myron Cohen to some extent. He worked with fellow vaudevillian Milton Berle over the years, and gained a good deal of recognition as a (planted) heckler in Berle's weekly variety , the Company's President. Cygne will make available up to 30% of Messrs. Benson's and Manuel's time and the Company will receive an aggregate fee of $450,000 per year. Ann Taylor has agreed to register the shares to be issued to Cygne for resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. , although Cygne will be subject to certain restrictions on the timing of sales and the amount of shares which can be sold at any one time. The Company does not expect Ann Taylor to continue as a customer following this transaction. Cygne Designs Inc. is a private label designer, merchandiser and manufacturer of woven and knit career and casual clothing for women. -0-
Cygne Designs Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Fiscal Year Ended
Feb. 3, Jan. 28, Feb. 3, Jan. 28,
1996 1995 1996 1995
Net sales $119,549 $157,416 $540,063 $516,105 Cost of goods sold 124,985 130,059 510,761 433,700 Gross profit (loss) (5,436) 27,357 29,302 82,405 Selling, general and administrative expenses 20,622 16,532 72,182 54,261 Gain on sale of subsidiary, net -- -- (4,742) -- Loss on sale of GJM business, net 31,239 -- 31,239 -- Write-off of goodwill 11,743 -- 48,949 -- Amortization of intangibles 557 1,100 3,425 2,505 (Loss) income from operations (69,597) 9,725 (121,751) 25,639 Interest expense 2,239 2,712 8,813 7,620 (Loss) income before income taxes and minority interests (71,836) 7,013 (130,564) 18,019 Provision (benefit) for income taxes 910 2,107 (6,216) 5,568 (Loss) income before minority interests (72,746) 4,906 (124,348) 12,451 Income attributable to minority interests 311 290 1,710 1,642 Net (loss) income $ (73,057) $ 4,616 $(126,058) $ 10,809 Net (loss) income per share $ (5.87) $ 0.35 $ (10.04) $ 0.93 Weighted average number of common and common equivalent shares outstanding 12,438 13,210 12,550 11,658 -0- CONTACT: Cygne Designs, Inc. Roy E. Green Chief Financial Officer 212/354-6474 or Morgen-Walke Associates David Walke/Howard Zar/Shannon Moody mood·y adj. 1. Given to frequent changes of mood; temperamental. 2. Subject to periods of depression; sulky. 3. Expressive of a mood, especially a sullen or gloomy mood. Press: Leslie Feldman 212/850-5600 |
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