Donnkenny, Inc. Announces Second Quarter 1999 Results.NEW YORK--(BUSINESS WIRE)--Aug. 16, 1999-- Donnkenny, Inc. (Nasdaq:DNKY) today announced financial results for the second quarter ended June June: see month. 30, 1999. 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 were $34.7 million, as compared to $42.2 million reported during last year's second quarter. The Company reported a net loss of $2.4 million, or a loss of $0.17 per 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. share, compared to a loss of $993,000, or a loss of $0.07 per basic and diluted share, for the same period a year ago. The average number of common shares and common stock equivalents outstanding for purposes of computing computing - computer 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 were 14,201,900 compared to 14,169,600 for the comparable period in 1998. For the six months ended June 30, 1999, net sales were $85.8 million, as compared to $94.7 million reported for its six month period ended June 30, 1998. Included in the results for the Company's six month period is a non-recurring charge of $6.4 million, or $0.45 per share for the Company's pending shareholders' class action lawsuits class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax . Excluding the charge, the Company reported a net loss of $891,000, or a loss of $0.06 per basic and diluted share, compared to net income of $27,000, or $0.00 per basic and diluted share, for the same period a year ago. The average number of common shares and common stock equivalents outstanding for purposes of computing diluted earnings per share were 14,185,800 compared to 14,130,100 for the comparable period in 1998. Harvey Harvey, city (1990 pop. 29,771), Cook co., NE Ill., a suburb S of Chicago; inc. 1895. Its manufactures include steel castings, metal products, chemicals, machinery, and electronic equipment. Harvey has an oil research center. The city was founded by Turlington W. Appelle, Chairman and Chief Executive Officer of Donnkenny, Inc. stated, "While results for the quarter reflect challenging trends to the moderate segment of ladies apparel manufacturing, we continue to seek ways to improve financial performance. As such, we remain focused on further reducing 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. and have lowered sales, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. on an absolute basis by $1.9 million during the quarter. Furthermore, we are looking to identify additional ways to implement cost savings programs for the balance of fiscal 1999 and beyond." Donnkenny designs, manufactures, imports and markets a broad line of moderately-priced women's and children's sportswear. The Company's major labels include Victoria Jones(R), Casey Casey is an Irish surname, and may refer to
Except for historical information contained herein, the statements in this release 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. and made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions 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. 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. involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include a softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. of retailer or consumer acceptance of the Company's products or pricing pressures and other competitive factors. These and other risks are more fully described in the Company's 10-K and 10-Q filings with the Securities and Exchange Commission. -0-
DONNKENNNY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
NET SALES $ 34,708 $ 42,158 $ 85,759 $ 94,685
COST OF SALES 27,898 33,075 66,900 72,651
--------- -------- --------- ---------
Gross Profit 6,810 9,083 18,859 22,034
OPERATING EXPENSES
Selling, general and
administrative
Expenses 7,667 9,614 16,940 19,429
Provision for settlement
of litigation 6,394 6,394
Amortization of goodwill
and other related
acquisition costs 348 326 695 647
--------- -------- --------- ---------
Operating (loss) income (7,598) (857) (5,170) 1,958
INTEREST EXPENSE
(net of interest income
of $110 in 1998) 1,298 1,054 2,098 1,907
--------- -------- --------- ---------
(Loss) income before
income taxes (8,896) (1,911) (7,268) 51
INCOME TAX (benefit)
provision (83) (918) 17 24
---------- --------- --------- --------
NET (LOSS) INCOME $ (8,813) $ (993) $ (7,285) $ 27
========== ========= ========= ========
Basic and diluted (loss)
earning per
common share $ (0.62) $ (0.07) $ (0.51) $ 0.00
========== ========= ========= ========
Shares used in the
calculation of basic
and diluted (loss)
earnings per
common share 14,201,900 14,169,600 14,185,800 14,130,100
========== ========== ========== ==========
DONNKENNNY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands, Except Per Share Data)
June 30, December 31,
1999 1998
----------- ------------
(Unaudited)
CURRENT ASSETS
Cash $ 357 $ 503
Accounts receivable - net of
allowances of
$577 and $620, respectively 24,012 29,363
Recoverable income taxes 317 655
Inventories 22,359 21,972
Deferred tax assets 4,230 3,080
Prepaid expenses and other
current assets 1,181 1,265
Assets held for sale 479 1,799
Total current assets 52,935 58,637
PROPERTY, PLANT AND EQUIPMENT, NET 6,170 6,337
OTHER ASSETS 192 2,327
INTANGIBLE ASSETS 32,219 32,914
----------- -----------
TOTAL $ 91,516 $ 100,215
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 1,160 $ 154
Accounts payable 9,189 8,391
Accrued expenses and other
current liabilities 6,378 7,431
----------- -----------
Total current liabilities 16,727 15,976
----------- -----------
LONG-TERM DEBT 26,016 31,901
DEFERRED TAX LIABILITIES 4,230 3,080
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $.01 par value;
authorized 500 shares, issued
none --- ---
Common stock, $.01 par value.
Authorized 20,000 shares, issued
and outstanding 14,230 and
14,170 shares, respectively 142 142
Additional paid-in capital 47,771 47,595
Shares issuable on settlement
of litigation 2,394
Retained (deficit) earnings (5,764) 1,521
------------ ------------
Total Stockholders' Equity 44,543 49,258
------------ ------------
TOTAL $ 89,510 $ 100,215
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