Donnkenny reports third quarter and nine months results.NEW YORK--(BUSINESS WIRE)--Nov. 15, 1996--Donnkenny, Inc. (Nasdaq: DNKY) today announced financial results for the third quarter and nine month period ended Sept. 30, 1996. On Sept. 24, 1996, the company announced its decision to change its fiscal year end to Dec. 31 of each year from one ending on the first Saturday Saturday: see week; Sabbath. on or after Nov. 30 of each year. Accordingly, the three and nine month periods in 1996 being reported on below ended on Sept. 30, 1996, and the three and nine month periods in 1995, referred to below, ended on Sept. 2, 1995. 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 three months ended Sept. 30, 1996, increased 30% to $86.6 million, as compared to $66.7 million for the three months ended on Sept. 2, 1995. Approximately $13.9 million (70%) of this increase results from the inclusion of the Beldoch Industries and Oak Hill Sportswear acquisitions, acquired in June June: see month. 1995 and July 1995, respectively, and the inclusion of Fashion Avenue Knits knit 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 , which was acquired Sept. 4, 1996. The remaining increase relates to stronger sales in all product categories and the change in the company's fiscal reporting periods, which includes the month of September results in the 1996 third quarter as compared to the month of May results in the 1995 third quarter. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the third quarter ended Sept. 30, 1996, was $9.2 million, a 13.6% increase over the $8.1 million for the third quarter ended Sept. 2, 1995. Net income for the three month period ended Sept. 30, 1996 was $4.6 million or $.33 per share, representing a 9.5% increase over the $4.2 million, or $.30 per share for the nine month period ended Sept. 2, 1995. For the nine month period ended Sept. 30, 1996, Donnkenny reported net sales of $189.8 million, an increase of 70%, compared to the $111.6 million for the nine month period ended Sept. 2, 1995. Approximately $66.1 (85%) of this increase related to the Oak Hill, Beldoch and Fashion Avenue Knits acquisitions, as described above. Operating income for the nine months ended Sept. 30, 1996, was $11.1 million, a 23% increase over the $9.0 million for the nine month period ended Sept. 2, 1995. Net income for the nine months ended Sept. 30, 1996 increased 12.5% to $4.5 million, or $.32 per share, as compared to $4.0 million or $.29 per share earned in the nine month period ended Sept. 2, 1995. At Sept. 30, 1996, the company had working capital and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. $84.1 million and $72.9 million, respectively. Net sales, operating income, net income and earnings per share for the three and nine month periods ended Sept. 2, 1995 and the first two quarters of 1996 stated above have been restated from amounts previously reported to give proper effect to the recognition of sales in appropriate periods. The company expects results for 1996 to be significantly below analyst estimates of $1.30 - $1.40 per share. Based on shipments to date, the company expects to be profitable in the fourth quarter and solidly profitable for the full fiscal year. Except for historical information, the statements in this release are forward-looking 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 which may cause the company's actual results in future periods to differ materially from forecasted results. On Nov. 12, 1996, an individual commenced an action against the company and certain officers in the United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. for the Southern District of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of in a purported pur·port·ed adj. Assumed to be such; supposed: the purported author of the story. pur·port  ed·ly adv. class action. The company
is in the process of reviewing the complaint. -0-
DONNKENNNY, INC.
Consolidated Statements of Income
(In Thousands, Except Share and Per Share Data)
Three Months Ended Nine Months Ended
09/30/96 09/02/95 09/30/96 09/02/95
Net sales $ 86,562 $ 66,679 $189,774 $111,570
Cost of sales 65,070 47,612 140,261 77,058
Gross profit 21,492 19,067 49,513 34,512
Selling, general and
administrative expenses 11,923 10,673 37,244 24,864
Amortization of goodwill
and other related
acquisition costs 402 298 1,137 674
Operating income 9,167 8,096 11,132 8,974
Interest expense 1,402 1,102 3,544 2,341
Income before income taxes 7,765 6,994 7,588 6,633
Income taxes 3,182 2,785 3,111 2,657
Net income $4,583 $4,209 $4,477 $3,976
Income per common share $0.33 $0.30 $0.32 $0.29
Weighted average number of
common and common equivalent
shares outstanding 14,034,295 14,198,272 14,001,093 13,770,202
-0-
CONTACT: Donnkenny, Inc. Stuart S. Levy, 212/730-7770 or Morgen-Walke Associates, Inc. Investor Relations Investor relations The process by which the corporation communicates with its investors. : David Walke/Howard Zar, 212/850-5600 |
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