Cygne Designs, Inc. announces third quarter and nine months 1996 results.NEW YORK--(BUSINESS WIRE)--December 16, 1996--Cygne Designs, Inc. (Nasdaq:CYDS CYDS Centre for Youth Drug Studies (Australia) ) today announced results of operations for the third quarter and nine months ended November November: see month. 2, 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 third quarter ended November 2, 1996 were $80.7 million, a decrease of $79.4 million or 49.6% from the comparable prior period. Net sales for the nine months ended November 2, 1996 were $240.4 million, a decrease of $180.2 million or 42.8% from the comparable prior period. The decreases in net sales for the third quarter and nine months of $79.4 million and $180.2 million, respectively, were primarily attributable to the sale of the Company's GJM GJM Golden Jubilee Medal GJM Gay Japanese Male business in February February: see month. 1996, which generated sales of $31.8 million and $67.8 million, respectively, in the comparable 1995 periods, discontinued dis·con·tin·ue 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 and product lines, which generated sales of $33.9 million and $100.4 million, respectively, in the comparable 1995 periods and decreases in sales to Ann Taylor Notable people named Ann Taylor include:
During the third quarter and nine months ended November 2, 1996 the Company had reorganization expense of approximately $4.8 million as a result of the downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing of the Company and the redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of assets necessary to meet changes in continuing customer needs. During the third quarter and nine months ended October October: see month. 28, 1995 the Company wrote-off approximately $37.2 million of the goodwill incurred in connection with the acquisition of Fenn, Wright and Manson Man·son , Sir Patrick 1844-1922. Scottish parasitologist. One of the founders (1899) of the London School of Tropical Medicine, he introduced (1877) the hypothesis that the mosquito is host to the malaria parasite. in April 1994. Net income for the third quarter of 1996 was $20.0 million, or $1.61 on a per share basis, compared to a net loss of $43.3 million, or $3.48 on a per share basis, in the comparable prior period. Net income for the nine months of 1996 was $19.9 million, or $1.60 on a per share basis, compared to a net loss of $53.0 million, or $4.21 on a per share basis, in the comparable prior period. As previously announced, the Company completed on September September: see month. 20, 1996 a transaction with AnnTaylor Stores Corporation whereby it sold to Ann Taylor Cygne's 60% interest in CAT, Cygne's former sourcing joint venture arrangement 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 were used in sourcing merchandise for Ann Taylor. On the closing of the transaction, Cygne received 2,348,145 shares of Ann Taylor common stock and approximately $9.7 million in cash, subject to post-closing adjustments. Ann Taylor also assumed certain liabilities of the acquired sourcing operations. The Company used substantially all of the cash proceeds received on closing of the transaction to repay a portion of its outstanding senior bank 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. . As a result of the transaction, the Company realized a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $29.6 million. Between October 23 and December 13, 1996, the Company sold an aggregate of 1,988,000 shares of the Ann Taylor common stock received upon the closing of the transaction at various prices resulting in aggregate gross proceeds of approximately $38.3 million before brokerage commissions and transaction expenses. The Company has used and intends to continue to use a substantial portion of such proceeds to pay down its outstanding indebtedness, and expects to use the balance of such proceeds for working capital purposes, including costs associated with the start-up Start-up The earliest stage of a new business venture. of its business to manufacture and distribute brand name apparel bearing the KENZO JEANS and KENZO STUDIO labels. With respect to these stock sales, an aggregate of 509,000 shares were sold during the third quarter. Net sales to Ann Taylor for the third quarter and nine months of 1996 amounted to 65.0% and 70.5%, respectively, of the Company's net sales. For the third quarter and nine months of 1996 CAT and the Company's Ann Taylor Woven Division had combined net sales to Ann Taylor of $52.5 million and $169.6 million, respectively, and combined net income of $2.3 million and $5.5 million, respectively. Since the closing of the sale of the Company's Ann Taylor sourcing business, the Company has not had, and does not anticipate that it will have, sales to Ann Taylor. If the transaction with Ann Taylor had been 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. on February 4, 1996, and after giving effect to the sale of the Company's GJM business, the Company would have had 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 net sales of $28.2 million and $70.8 million for the third quarter and nine months of 1996, respectively. Pro forma gross profit for the third quarter and nine months of 1996 would have been $2.7 million and $7.4 million, respectively. Pro forma loss from operations for the third quarter and nine months of 1996 would have been $7.0 million and $10.8 million, respectively. Pro forma net loss for the third quarter and nine months of 1996 would have been $7.2 million and $10.9 million, respectively. The pro forma net loss per share for the third quarter and nine months would have been $0.58 and $0.87, respectively. 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
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
Nov. 2, Oct. 28, Nov. 2, Oct. 28,
1996 1995 1996 1995
Net sales $ 80,709 $160,080 $240,351 $420,514
Cost of goods sold 72,013 149,146 211,269 385,776
Gross profit 8,696 10,934 29,082 34,738
Selling, general and
administrative expenses 6,566 16,187 23,903 50,530
Gain from sale of AnnTaylor
Woven Division and CAT 29,588 -- 29,588 --
Gain from sale of
subsidiary, net -- -- -- 4,742
Reorganization expense 4,813 -- 4,813 --
Bad debt expense -- -- -- 1,030
Amortization of intangibles 91 957 273 2,868
Write-off of goodwill -- 37,206 -- 37,206
Income (loss) from
operations 26,814 (43,416) 29,681 (52,154)
Other income 739 -- 1,293 --
Interest expense 1,045 1,984 2,975 6,574
Income (loss) before
provision for income taxes
and minority interests 26,508 (45,400) 27,999 (58,728)
Provision (benefit) for
income taxes 6,307 (2,712) 7,124 (7,126)
Income (loss) before
minority interests 20,201 (42,688) 20,875 (51,602)
Income attributable to
minority interests 230 578 961 1,399
Net income (loss) $19,971 $ (43,266) $ 19,914 $(53,001)
Net income (loss)
per share $ 1.61 $ (3.48) $ 1.60 $ (4.21)
Weighted average number of
common and common equivalent
shares outstanding 12,442 12,438 12,439 12,587
CONTACT: CYGNE DESIGNS, INC. Roy E. Green Chief Financial Officer 212-354-6474 or IR CONTACT: 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: Stacy Berns, Michael McMullan Morgen-Walke Associates 212-850-5600 |
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