Donnkenny, Inc. Reports Net Profit Before Accounting Change in the First Quarter of 2002.Business Editors NEW YORK--(BUSINESS WIRE)--May 14, 2002 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, 2002. The Company reported that in the first quarter, it had net profit before accounting change of $359,000 or $.08 per share compared to $357,000 or $.08 per share in 2001. Although 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 first quarter of 2002 were $24.4 million, as compared to $37.3 million reported in 2001, gross margin as a percentage of sales was 26.2% for the first quarter 2002 as compared to 23.7% for the first quarter of 2001. The decline in sales was primarily due to the Company's discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the Decade dress business, the consolidation of Pierre Cardin
v. knit or knit·ted, knit·ting, knits v.tr. 1. To make (a fabric or garment) by intertwining yarn or thread in a series of connected loops either by hand, with knitting needles, or on a , the Company's decision to exit the career private label business and the continuation of the slow retail environment, which caused a drop in the Company's core businesses. Selling general and administrative expenses were reduced by $1.5 million this year from $6.8 million in the first quarter of 2001 to $5.3 million for the first quarter of 2002. In the first quarter of 2002, the Company adopted 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 requires that companies change the accounting for goodwill from an amortization method to an 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. only approach. This resulted in a one time impairment charge for the accounting change of $28.7 million. 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 pleased that our ongoing first quarter profit was equal to last year, due to our continuing emphasis on gross margin improvement and expense control. The improvement in gross margin demonstrates a continuing commitment to improving our sourcing strategies and controlling inventory levels while continuing to lower selling, general and administrative expenses. While the net income for the quarter reflects a loss due to the accounting treatment for our intangible assets, our ongoing performance reflects the Company's new strength - the ability to produce a profit despite a soft retail environment." Net loss for the quarter after the change in accounting principle was $28.4 million or a loss of $6.50 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. In 2001 the Company reported net income of $357,000 or $.08 per basic and diluted shares. The weighted average number of common shares and common stock equivalents for purposes of computing computing - computer basic and 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 for 2002 and 2001 was 4,367,417. Donnkenny, Inc. designs, manufactures, imports and markets a broad line of moderately priced women's sportswear. The Company's major labels include Pierre Cardin(R), Delta Burke The name Burke (from Irish Gaelic de Burca, of Norman origin). In English the meaning of the name Burke is "fortified hill." See also Berkley. Places Australia
American military leader who commanded the Texans who died in the defense of the Alamo (1836). (R). 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 Balance Sheets
(in thousands, except per share data)
March 31, December 31,
2002 2001
----------------- -----------------
(Unaudited)
CURRENT ASSETS
Cash $ 102 $ 39
Accounts receivable
- net of allowances of
$149 and $116, in 2002
and 2001 respectively 18,045 25,225
Recoverable income taxes 381 381
Inventories 13,440 17,773
Deferred tax assets 1,662 1,662
Prepaid expenses and other
current assets 565 1,220
Assets held for sale 623 788
----------------- -----------------
Total current assets 34,818 47,088
PROPERTY, PLANT AND EQUIPMENT,
NET 5,246 5,379
OTHER ASSETS 377 368
INTANGIBLE ASSETS 821 4,198
GOODWILL - 25,367
----------------- -----------------
TOTAL $ 41,262 $ 82,400
================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of
long-term debt $ 683 $ 933
Accounts payable 5,439 7,760
Accrued expenses and
other current
liabilities 2,054 3,504
----------------- -----------------
Total current
liabilities 8,176 12,197
----------------- -----------------
LONG-TERM DEBT 26,112 34,844
DEFERRED TAX LIABILITIES 1,662 1,662
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 2002 and 2001 44 44
Additional paid-in capital 50,449 50,449
Deficit (45,181) (16,796)
----------------- -----------------
Total Stockholders' Equity 5,312 33,697
----------------- -----------------
TOTAL $ 41,262 $ 82,400
================= =================
See accompanying notes to consolidated financial statements.
DONNKENNY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended
-------------------------------------------------
March 31, 2002 March 31, 2001
--------------------- ----------------------
NET SALES $ 24,438 $ 37,308
COST OF SALES 18,021 28,454
--------------------- ----------------------
Gross profit 6,417 8,854
OPERATING EXPENSES:
Selling, general and
administrative expenses 5,345 6,773
Amortization of goodwill
and other related
acquisition costs - 373
--------------------- ----------------------
Operating income 1,072 1,708
INTEREST EXPENSE 668 1,306
--------------------- ----------------------
Income before income
taxes and cumulative
effect of change in
accounting
principle 404 402
INCOME TAXES 45 45
--------------------- ----------------------
Income before cumulative
effect of change in
accounting principle 359 357
Cumulative effect of
change in accounting
principle (no tax
benefit recognized) 28,744 -
--------------------- ----------------------
NET INCOME (LOSS) $ (28,385) $ 357
===================== ======================
Basic earnings per common share:
Income before accounting
change $ 0.08 $ 0.08
Cumulative effect
of accounting change (6.58) -
--------------------- ----------------------
Net income
(loss) $ (6.50) $ 0.08
===================== ======================
Diluted earnings per common share:
Income before accounting
change $ 0.08 $ 0.08
Cumulative effect of
accounting change (6.58) -
--------------------- ----------------------
Net income
(loss) $ (6.50) $ 0.08
===================== ======================
Shares used in the
calculation of
earnings per share:
Basic 4,367,417 4,367,417
===================== ======================
Diluted 4,367,417 4,367,417
===================== ======================
See accompanying notes to consolidated financial statements.
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