Donnkenny, Inc. Reports First Quarter Earnings.Business Editors NEW YORK--(BUSINESS WIRE)--May 14, 2003 Donnkenny, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: DNKY) today reported its financial results for the first quarter ended March 31, 2003. The Company reported that in the first quarter 2003, 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 were $18.9 million, as compared to $24.4 million in the first quarter 2002. The decline in sales was primarily due to the slow retail environment influenced by uncertainty about the war with Iraq Iraq or Irak (both: ēräk`, ĭrăk`), officially Republic of Iraq, republic (2005 est. pop. 26,075,000), 167,924 sq mi (434,924 sq km), SW Asia. and low consumer confidence, which caused a drop in the Company's core businesses. Gross margin as a percentage of sales was 30.0% for the first quarter 2003 as compared to 26.2% for the first quarter 2002. Selling, general and administrative expenses of $5.3 million in the first quarter 2003 were at the same level as in the first quarter 2002. In the first quarter 2003, net income before an accounting change adopted in 2002 was $55,000 or $0.01 per share compared to net income of $359,000 or $0.08 per share in 2002. Net profit for the first quarter 2003 was $55,000 or $0.01 per share compared to a net loss of $28.4 million or $(6.50) per share in the first quarter 2002 after application of the accounting change. The weighted average number of common shares and common stock equivalents for purposes of computing computing - computer basic earnings per share for 2003 and 2002 was 4,367,417, and for 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 was 4,419,543 and 4,434,407, respectively. The net loss in the first quarter 2002 was the result of the Company adopting the accounting rule known as SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142 "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ". SFAS 142 required that companies change the accounting for goodwill from an amortization method to an impairment-only approach. This resulted in a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge for the accounting change of $28.7 million recorded by the Company in 2002. In commenting on the first quarter results, Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. H. Levy To assess; raise; execute; exact; tax; collect; gather; take up; seize. Thus, to levy a tax; to levy a Nuisance; to levy a fine; to levy war; to levy an execution, i.e., to levy or collect a sum of money on an execution. A seizure. , Chairman and 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. of Donnkenny, said: "We are not happy with our first quarter performance and remain concerned about the very slow retail environment, consumer confidence and a continuing weak economy. However, we are very excited about the diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of our product lines with our entry into the ladies coat business and the license to manufacture coats under the Bill Blass Blass can refer to several people
To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. and grow our business, we remain conservative in our outlook." Donnkenny, Inc. designs, manufactures, imports and markets a broad line of women's sportswear under the labels Pierre Cardin
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.
DONNKENNY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except shares and per share data)
(unaudited)
Three Months Ended
-----------------------
March 31, March 31,
2003 2002
----------- -----------
NET SALES $ 18,954 $ 24,438
COST OF SALES 13,249 18,021
----------- -----------
Gross profit 5,705 6,417
OPERATING EXPENSES:
Selling, general and administrative expenses 5,346 5,345
----------- -----------
Operating income 359 1,072
INTEREST EXPENSE 318 668
----------- -----------
Income before income taxes and cumulative effect
of change in accounting principle 41 404
INCOME TAXES (BENEFIT) (14) 45
----------- -----------
Income before cumulative effect of change in
accounting principle 55 359
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE (no tax benefit recognized) - 28,744
----------- -----------
NET INCOME (LOSS) $ 55 $ (28,385)
=========== ===========
Basic earnings per common share:
Income before accounting change $ 0.01 $ 0.08
Cumulative effect of accounting change - (6.58)
----------- -----------
Net income (loss) $ 0.01 $ (6.50)
=========== ===========
Diluted earnings per common share:
Income before accounting change $ 0.01 $ 0.08
Cumulative effect of accounting change - (6.58)
----------- -----------
Net income (loss) $ 0.01 $ (6.50)
=========== ===========
Shares used in the calculation of earnings per
share:
Basic 4,367,417 4,367,417
=========== ===========
Diluted 4,419,543 4,434,407
=========== ===========
DONNKENNY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except per share data)
March December
31, 31,
2003 2002
------------ ---------
(Unaudited)
CURRENT ASSETS
Cash $ 126 $ 66
Accounts receivable - net of allowances of
$119 and $116 in 2003 and 2002,
respectively 14,798 20,634
Recoverable income taxes 62 203
Inventories, net 13,561 15,949
Prepaid expenses and other current assets 607 615
Assets held for sale 380 402
------------ ---------
Total current assets 29,534 37,869
PROPERTY AND EQUIPMENT, NET 4,181 4,515
OTHER ASSETS 211 234
INTANGIBLE ASSETS 821 821
------------ ---------
TOTAL $ 34,747 $ 43,439
============ =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ - $ 253
Accounts payable 4,920 10,101
Accrued expenses and other current
liabilities 1,859 2,209
------------ ---------
Total current liabilities 6,779 12,563
------------ ---------
LONG-TERM DEBT 20,767 23,730
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $.01 par value; authorized
500 shares, issued none
Common stock, $.01 par value. Authorized
10,000 shares, issued and outstanding 4,367
shares in 2003 and 2002 44 44
Additional paid-in capital 50,449 50,449
Deficit (43,292) (43,347)
------------ ---------
Total Stockholders' Equity 7,201 7,146
------------ ---------
TOTAL $ 34,747 $ 43,439
============ =========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion